Buying Your Own Office – Should I Purchase Real Estate?

Buying Your Own Office – Should I Purchase Real Estate?

Be Sociable, Share! Tweet As a banker, a great many of the loans I do are for those looking to purchase real estate – their own office building, warehouse or industrial facility for example. The most common question is whether they can afford it, not whether it makes good financial sense to purchase it. Why Purchase Real Estate? One owner may feel a building location is ideal and wants to remain there with no possibility of being evicted. Having a customer base that is familiar with your location is a big plus. Other owners want to modify the building to suit their needs, and they don’t want to make those expensive improvements without owning the property. And of course a building often appreciates in value and allows the owner to build equity. All of which sounds great – but is it? Sometimes it Makes Sense, Sometimes it Doesn’t Well, the short answer is that it depends. If the building is one that is particularly well suited for the company that will occupy it, then it might make sense. I have a customer now who produces granite countertops for kitchens and baths. They need enough space to store the stone slabs, and an overhead crane to move them, an entry for a forklift, and a showroom. Getting all of that in one space is difficult. Once they have it, they don’t want to lose it, hence the desire to purchase. It helps that the mortgage payments, if they stay in budget, will be significantly less than rent. This is a great reason to buy. However, even if mortgage payments are less...
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