Equity Appreciation: Every dollar your property appreciates and every dollar applied toward the mortgage principal translates into a dollar of equity. The buyer of a 11,019 sq. ft. unit at Derry Business Center with a $97,906 down payment and an 90% SBA loan would enjoy equity growth of approximately $229,000 in 5 years, $518,000 in 10 years, and $885,000 in 15 years (assuming a mere 2% annual appreciation in real estate values). By owning rather than leasing, you create an inflation-proof investment that will grow over time. See Lease vs. Buy Analysis (PDF) for more information.
Lower Monthly Cost: Usually, your total cost of ownership is less than your cost to lease. In effect, by owning your space, you "eliminate the middleman" (your landlord), who adds a profit margin on top of the costs of ownership. Take advantage of currently low interest rates and favorable loan offerings to own a new unit—fit-up the way you want it—for a lower monthly payment comparable to leasing!
Predictability and Certainty: Without a landlord, you will never face a rent increase. The management and maintenance of the building and grounds will be controlled by an association of owners with common interests in controlling costs and properly maintaining functionality and aesthetics. You will never be forced to move to suit your landlord's plans. You will be able to invest in improvements, changes, new equipment, etc. without the risk of losing your investment when the lease terminates. Every improvement and maintenance step that you take will benefit you, not the landlord.
Flexibility: If you decide to move, you can do so at any time without penalty or the need to negotiate a lease buyout. If you do move, you can sell the unit or you could hold it and lease it out as an investment, whichever best suits your cash flow and tax situation at the time. If you need to raise cash, you can borrow against the equity in your unit or even sell the unit to an investor in a sale-leaseback transaction.
Prior to making an investment in a business condominium, you should consult with your accounting and tax advisor to be sure that it makes sense given your specific financial and tax situation. We believe that the above information and analysis are correct and applicable to the typical buyer, but by necessity we have made certain assumptions that may or may not apply in your specific situation.
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