Question

Rent or Buy, tell me why. Be sure to cite for both commercial property as a Schedule-C business property as well as owner occupied residential property.

Answer 1

Answer: For Commercial or business property- It is the property that is used for business purpose, people open their shops, stores and offices in the commercial space.

If You are opening a new office or business, You should go for Rent or lease because of the following advantages of rent/lease-

Cash flows- Initially you will get cash flows that will boost your business, if you purchase a property, it will incur huge initial cost that will affect the cash flows so if company takes the property on rent, it has to pay only rent and huge amount of money will not get stuck.

Maintenace of building- If company purchases a building, it has to spend on maintenance of the building that may be huge. If you want to concentrate on your business and do not want to bother about maintenance and repair then lease is a better option.

Flexibility- If your business is cyclical or you do not want to fix a one place, you may move or shift in the future so leasing is the best option. If business buys the property, it may hesitate to shift or expand the business because it will need more space so taking property on rent is the best option.

Huge loan- If you buy a commercial property or space, you have to take loan and your liability will increase that can be removed you buy the property on rent.

Residential property- It is the property, that is bought for residing or living purpose.

Buying the property- If you have enough savings and you have decided where you want to live and you are getting the residential property/flat/apartment at lower price and getting loan at lower rate of interest, you must buy the property so that whatever Rent you would pay if you would have the property on rent, you can pay that as EMI of your home loan.