Making the decision to lease or buy office space has become a common issue among many business owners. Of course, both methods have their pros and cons, as you will learn later in this article. However, if you are a small business owner and your lease agreement is almost expiring, it would be wise to consider buying an office space instead of renewing your lease.

Difference Between Leasing and Buying

The two have confused people for a long time. However, it is not hard to distinguish between buying and leasing office space because their differences are conspicuous. When it comes to definitions, leasing means that you sign an agreement, which allows you to use a particular property while paying some money every month. When you get into such an agreement, you are called a lessee, while the property owner is known as the lessor.  

On the flip side, buying a commercial space implies that you have purchased it with cash or loan proceeds. If you acquired a loan to purchase the property, then you will only own it outright once you pay off the loan.

Pros and Cons of Buying Commercial Property


The value of the property appreciates
You can rent out part of it and make extra monthly income
Tax breaks


High upfront costs
You are responsible for the property’s maintenance
The mortgage can tie you to one place

Pros and Cons of Leasing Commercial Property


No upfront costs involved
Flexibility – you can decide to move to a new location once the lease agreement expires.
The property owner handles all repairs and maintenance
Affordability, especially in a competitive real estate market


There is no equity opportunity
The rent may be higher than the mortgage in some areas
Rent hikes may make it difficult for you to come up with a long-term budget

The decision to buy or lease commercial space depends on your financial situation and preferences. Buying is a great option if you are looking for an equity opportunity. 360 Commercial Capital is there to help you make an informed decision and give you all the financial help you may require.