Are you a professional such as an accountant, lawyer or architect running your business out of a leased office space? Are you tired of throwing your money away by renting? Consider owning an office condominium.
Condominiums are often in more desirable locations than rental units, and are generally customizable. While office condominiums are attractive for many reasons, purchase agreements can be complex. Read contracts carefully and understand exactly what you are getting into. Here are three common benefits to ownership.
Ownership requires a down payment, but the monthly costs may be similar to leasing. In some cases, the mortgage payment may be less than lease payments in the same area.
Additionally, you insulate your firm against rising rents; the stability of your monthly payment helps with long-term planning. Ownership has tax advantages as well.
If you are currently a sole proprietor, you may wish to create a limited liability company to purchase the condominium. Your practice then rents the office space from the LLC. This allows you to categorize the rent as a business expense. The LLC can offset the rental income with the building’s depreciation and interest on the loan.
This strategy means you are now an owner in two businesses. Adding others to your LLC has helps you reduce the risk of your investment. In the future, your LLC may decide to purchase more office space to lease to other businesses, which means an additional income stream for you.
Owning your office affords you more control over it. You can make minor cosmetic changes or major modifications. In short, you can do almost anything necessary to suit your individual business needs — without consulting a landlord.