Putting a commercial property for sale and actually making that transaction sure has its benefits. The returns are promising and it has been a proven real estate move. But it also isn’t fool proof. It’s not the best option on all occasions and there will be times when renting or leasing them out would prove more beneficial than otherwise. But why and when?
- It retains ownership. Selling transfers it. Renting out means lending the use of the space for an agreed upon period in exchange for a sum. That alone tells us that owners retain the titles to the assets and they can do with it whatever they wish to which brings us to our next point.
- It keeps control. Should you wish to, you can later on sell the commercial property or use it yourself. Tenants will be allowed its use but it comes with limits as written and signed into the contract. For instance, any changes or renovations to the property must be within the meets and bounds of the tenant-landlord agreement and contract otherwise the breach will constitute to damages.
- It allows tax savings. On some instances and depending on the legislations that apply to each town, city and country, owners get to enjoy some tax credits and deductions from leasing out as compared to selling the property in one go.
- It provides a long term income stream. Perhaps the most obvious of benefits, renting out instead of putting a commercial property for sale provides an added and long term income source which can last for years on end as long as the asset still stands and functionality is preserved.
- It can pay for its mortgage. The rent income received can be used to pay for any mortgages or loans taken by the owner in their acquisition of the commercial asset. This is of course given the premise that the rental rate is enough to cover all the costs and the mortgage together.
- It allows you to earn from property value growth. When putting a commercial property for sale, any amount of appreciation after that shall belong to and be enjoyed by its new owners. But not when you are merely renting it out. You get to capitalize on the additional value that grows over time which can also be translated into an increase in rental rates and therefore income.