Buying vs Leasing - What Is Better?

Originally Published November 14, 2017

Personally, what I’m noticing with all the activity and interest in commercial real estate is that a large portion of people are asking to buy property, so they can earn equity instead of pay rent. I hear it every week, regarding “Why am I paying rent to someone when I could be earning equity?” It’s a logical thought and one you should analyze, but don’t forget you can also lose equity if you buy something at the wrong time.

Equity isn’t a constant, it’s a market based number that can fluctuate based on what value you add to the asset and what stage of the cycle we’re in.

Be careful what decision you make and call a commercial real estate expert to discuss the market conditions you should be aware of when you are doing your analysis, whether you’re considering buying or leasing property for your business or operations.

What To Look For

There is an equilibrium point coming as this economic cycle continues. Demand is still strong and supply is limited, but supply is being created through new development and relocations to new construction that are leaving vacant space behind. In the short run, rates have increased at elevated levels, but those increases will slow. For example, there are 3 deals to speak about specifically that involved new buildings having been built or planned for users in East Tampa. Once those projects are completed there will be more product added to the market’s inventory, but some businesses will vacate and leave behind over 300,000 SF in big blocks of space. That will put pressure down on rates if those units are not backfilled immediately.

This is when “real estate” happens. When there’s little supply, little new development…Owners want high…Buyers want low; yet moves and transactions still have to happen because business doesn’t stop. What do you do? Call a commercial real estate expert!

How Fortress Commercial Real Estate Experts Can Help

Call Fortress CRE, so we can talk expert advice on where your real estate strategy should be focused in West Central Florida. Fortress Commercial Real Estate (CRE) adds value to business owners looking to grow through their real estate, office and building needs.

Contact us online, call us at 813.444.3330 or email us at kostas@FortressCRE.com for more sound advice.