What’s Smarter – Buying or Leasing Industrial Space in Northern Nevada?
real estate professional who will deliver the results in a clear and organized report. But understanding the advantages and disadvantages to the process of both buying and leasing in northern Nevada is a step in the right direction.
Keeps cash available
Reserves company debt availability
Lease payments are tax deductible
Available source of financing, as you acquire an asset for a marginal cost
Lease term agreement means fixed cost stability and predicability
Offers ease of expansion or downsizing within the facility or into a new one
Potential for broader range of locations not available in the for-sale locations
Allows you to focus on business, not real estate
Can be more expensive for a firm with good earnings, financing availability and opportunity to benefit from tax perks
Potential for long-term lease commitment
Potential for loss of property appreciation
Lack of control over other tenants and facility operations
Tax savings from depreciation and mortgage interest
Potential for appreciation
Potential income from tenants
Burden of initial cash outlay
Impact of negative balance sheet of mortgages and trust deeds
Costs associated with zoning requirements and new regulations
Risk of market value fluctuations
Potential inflexibility due to lack of expansion and contraction abilities
Understanding the Process
These intangible elements to buying or leasing industrial real estate market in northern Nevada are but preliminary concepts to understand. There are also financial comparison techniques that must be performed. A comprehensive analysis, performed in after-tax dollars, is the best way to make the most sensible financial decision.
A comparison between the relative capital investment for both options to the user’s after-tax discount rate/opportunity cost is then used in a sensitivity analysis. This gives a yield to be compared with the user’s opportunity cost, which can be used as an indication of whether the capital investment is better suited to buying or investing.
The decision to buy or lease here in northern Nevada or anywhere isn’t simple, and making the wrong decision can be detrimental to your business’ future success. Bringing in an expert, like the experienced agents at Miller Industrial Properties, to help you carefully weigh all considerations – and ensuring you aren’t overlooking something critical – is the best way to make an informed decision.