If you’re a business owner, you likely understand the benefits of renting rather than owning a property. However, a time can arrive when the restrictions of being a renter can hurt your prospects for expanding your operation, or perhaps you simply want greater control over your property. If this is the case, you could consider investing in owner occupied commercial real estate, or OOCRE. Investing in an OOCRE can provide you with important financial and material benefits for your business.
Among the benefits of OOCRE is that your company will have greater control over occupancy costs, including maintenance decisions and installation of utilities. An OOCRE also grants you control over parking rights. Furthermore, you can expand your building without running up against your landlord’s restrictions.
Having an OOCRE can allow you to become a landlord yourself, provided your business occupies at least 51 percent of your own building. Now you can lease your own property out to other parties and control who becomes a tenant. If you invest in your own commercial property, the property could produce a return that boosts your business capital.
Financial lenders view owner occupied commercial real estate as lower risk and are more likely to approve such loans. Since the buyer is going to be the building’s main occupant, the lender knows the buyer is going to be fully engaged with the property to make it work financially. Also, if the buyer is part of a company that is known to be profitable and has a steady cash flow, the lender’s risks are further reduced.
Other benefits of OOCRE include tax reductions, more favorable interest rates, a smaller down payment, and longer term fixed interest rates. Examine your current balance sheet to determine how these benefits may help your bottom line.