If you’re looking into commercial real estate in Chicago, deciding between buying and leasing is important. While leasing seems easy at first, buying offers several long-term benefits.
Here are three key reasons why buying commercial real estate is a more sensible option than leasing.
1. Build Equity with Commercial Real Estate Properties
When you buy a commercial property, your payments help you build ownership equity over time.
- Lease payments go to a landlord without building any ownership.
- Property value in Chicago tends to appreciate, increasing your investment worth.
- Owning a property provides an asset you can sell or refinance in the future.
Find new commercial real estate properties for sale.
2. Control Your Space Without Lease Restrictions
Owning commercial property gives you the freedom to make changes as needed.
- No restrictions on remodeling or signage.
- Freedom to set business hours without landlord rules.
- Avoid lease clauses that limit your business operations.
3. Predictable Costs and Tax Benefits
Buying offers stable, predictable expenses compared to leasing.
- Fixed mortgage payments vs. variable lease increases.
- Tax benefits include depreciation and interest deductions.
- Avoid unexpected lease increases or rent hikes.
Whether you’re searching for listings, leases, or sales, it’s essential to work with experienced professionals. Learn more about KM Realty Group LLC!
Buying vs. Leasing Commercial Real Estate: Which Is Better?
1. Big Down Payment
- Buying a commercial property usually requires a big down payment.
- You pay a large amount of money upfront, often 20% of the property price.
- Leasing requires only small monthly payments, so less money is needed at first.
2. Must Qualify for Financing
- To buy property, banks check your credit and business income.
- It is not always easy to get a loan for buying commercial property.
- Leasing is easier because you don’t need a big loan, just regular monthly payments.
3. Loss of Flexibility
- Owning property means you stay in the same place for many years.
- It is hard to sell or move if your business needs to change.
- Leasing gives you the flexibility to change locations when the lease ends.
4. Responsibility Falls on You
- As the property owner, you are responsible for repairs, taxes, and maintenance.
- In leasing, the landlord often handles big repairs and property issues.
Advantages and Disadvantages of Buying and Leasing Commercial Property
Advantages of Buying
- You build equity over time.
- Fixed costs like mortgage payments.
- Freedom to modify the space.
Disadvantages of Buying
- High upfront costs.
- Hard to sell if the market changes.
- You handle all repairs and property taxes.
Advantages of Leasing
- Lower upfront costs.
- Flexible short-term agreements.
- Landlord handles big repairs.
Disadvantages of Leasing
- No ownership or equity.
- Lease terms may limit your business choices.
- Rent may increase unexpectedly.
Why Is Leasing Not a Good Option?
Many business owners think leasing is easy, but it has hidden problems:
- Monthly rent payments don’t help you own anything.
- You must follow strict lease rules about remodeling or operating hours.
- Landlords can raise rent every few years.
- You have no long-term investment.
- You depend on the landlord for big repairs.
Buying commercial real estate gives you more control and makes your business stronger over time.
Summary
Buying commercial real estate in Chicago helps you:
- Build long-term equity.
- Gain full control of your space.
- Enjoy predictable costs and tax advantages.
These benefits make purchasing a smart option over leasing.
Have questions? Chat with top-rated commercial real estate brokers to help navigate complex transactions.
Planning to lease? Contact Telia Bolden, our leasing agent, or schedule an office visit. Google Map
