Should I lease or buy commercial space for my small business?

The lease vs. buy decision for your business depends on several key factors:

When leasing makes sense:

• Your business is still growing and you may need to move within 3-5 years
• You want to preserve capital for business operations and inventory
• You prefer predictable monthly costs without maintenance surprises
• You're entering a new market and want to test the waters

When buying makes sense:

• Your business is established with stable cash flow (3+ years of profitability)
• You're committed to the location long-term (7+ years)
• You want to build equity instead of paying rent
• You need specialized build-outs that a landlord won't fund
• You want rental income from subletting extra space

Financial considerations:

• Commercial mortgages typically require 25-35% down
• You'll need to cover property taxes, insurance, and maintenance (the 'triple net' costs)
• Compare the total cost of leasing vs. buying over your expected hold period
• Factor in property appreciation and equity buildup when buying

A practical approach: Consider leasing for the first 2-3 years to establish your business, then evaluate buying once you have stable revenue and a clear long-term location strategy. Use the Commercial Lease vs. Buy calculator on our Calculators page to run the numbers.