Why Lease?

Real Estate:  Residential
Real Estate:  Vacation
Real Estate:  Commercial & Industrial
                  Equipment & Transportation



Real Estate

Residential:

For young "starting out on your own" individuals or couples, leasing / renting will help prepare you for future home ownership responsibilities, if so desired.

As a newcomer to a specific suburban area, leasing / renting provides an opportunity to spend time assessing the general surroundings to ensure it's the right neighborhood to stay in for a longer term or to later make a purchase.

Under a "Lease to Own" aka "Rent to Own" scenario, it gives potential home buyers an opportunity to gain ownership over time at a predetermined purchase price with a portion of the monthly lease/rent payment to the landlord getting applied toward the down payment, and while the property value increases. (The ability to structure an arrangement of this type is usually tied directly to market and economic conditions, and your keen skills and talents at negotiating the right deal).

Leasing can provide a means of living in high quality and full service settings under an "all inclusive" payment arrangement without all the ownership responsibilities i.e. maintenance, taxes, utilities, and ownership insurance costs - great for the retired folks.

Versus home ownership, leasing or renting your residence can offer several benefits such as;

• A property staff to contact when maintenance and repairs are required;
  
• No snow shoveling or lawn maintenance;
  
• No worries when you go away on vacation;
  
• Provides more disposable income for recreation and travel purposes;
  
• Potential personal income tax deductions related to all or most lease/rent payment expenses;
  
• No separate property tax payments;
  
• No mortgage payment interest fluctuating costs - lease/rent payments typically stay fixed for the set term;
  
• No hassles and costs associated with trying to sell your residence in tough economic times; At the end of the lease or rental agreement you can pack up and walk away without concern for finding a buyer and waiting for a sale to occur.

Vacation:

Although many of the reasons for leasing or renting your home (principle residence) could apply to vacation real estate, over the past few years with our ever increasing stressful lifestyles a vast number of all ages are shifting their home ownership interests to vacation properties while leasing over a three to five year term their principle residence, which is typically located much closer to where they work.

With this in mind, many young to middle aged folks today are seriously looking ahead to the period of retirement, thus all priorities turn to safely but quickly increasing their personal net worth. Naturally, this is the very same reason for the high demand and low supply on good recreational centers and vacation properties within a 2 to 4 hour travel distance from home. Essentially, causing the purchase price of vacation residences to soar, and at a pace far greater than that of a suburban home.   

This certainly tells us that many are realizing the benefits of leasing/renting their principle residence while building equity in a home through investing their savings into vacation real estate which rapidly increases in value. And, to minimize the risk, renting it out for certain periods when they're not making use of it. This helps with receiving additional income to carry the cost of owning a vacation home, while it keeps rising in value in leaps and bounds.

On the other hand, for those who already lease/rent or own their principle residences, and whether close to where they work or not, when it comes to getting away from the hustle and bustle for recreational or vacation purposes, renting a vacation residence can provide a means of seeing and experiencing a variety of different relaxing settings for the whole family. 
 

• In order to properly grow the business, the more cash available for this purpose the greater the opportunity it has to do so - it costs money to make money and tying up working capital in workspace real estate can surely lead to trouble, despite any appreciation it may gain over time;
  
  
• The need to maintain flexibility to expand or relocate the business for whatever reason is next to critical, and in many cases a prerequisite for ensuring the business has equitable value for selling or merging it with a competitor;
  
  
• In today's very competitive business world, standing still or maintaining the business at any given size conflicts with the ability to survive - even the best businesses have to become better and grabbing market share and keeping it is the name of the game.
  
  
  

Equipment & Transportation

These are the primary reasons for all of us to consider leasing our computers, cars, trucks, trailers, household goods and improvements etc. etc.

Preserves Lines of Credit:
Leasing will not tie up valuable lines of credit you may need for other expenses or to fuel growth and expansion if you're in business. And, in the grand scheme; nobody experiences financial difficulty because they have too much available cash.

Flexible Payment Options:
Leasing allows you to establish payment structures to meet budgetary requirements. Lease terms can range from 12 to 60 months (or more), with flexible renewal and walk away options.

Simple, Convenient Process:
The process is much easier than purchase borrowing. In many cases, you can enjoy 'one-stop' shopping for the items you need or want along with the financing. Credit approval and processing a lease is simplified and can be completed very quickly.

Let it pay for itself:
Leasing allows you to use the equipment or transportation item(s) for an agreed upon term and at a fixed payment amount. You pay for it as it's being used to generate revenue rather than spending loads of cash upfront. This helps to maximize the ability to match income with investment. A "pay as you profit" approach!
 
You can establish your acquisition cost in today's dollars, and then use the equipment or transportation item(s) while paying incrementally in today's dollars rather than inflated future dollars. And, later you can easily add extra equipment or accessories at a small increase to your inflation protected monthly cost, while writing off the annual payment costs as a full expense.

Potential Income Tax Benefits:
Lease payments are typically 100% tax deductible as a business expense, lowering your taxable income. And depending upon the residual factor and pre-determined obligations at the end of the Lease, you may only be paying payments based on approx. 70% of the total cost, and not having to worry about paying the residual.

Flexible End-of-Lease Options:
At the end of your lease, you can either i) purchase the equipment per the pre-determined purchase option, or ii) upgrade to new equipment, or iii) renew the lease at a significant monthly savings (refinance the deal), or iv) structure the deal to walk away at the end of the lease with no penalty or further obligation.

Minimize Balance Sheet Liabilities:
Lease payments may be eligible for "off-balance sheet" treatment, where items are treated as expenses rather than assets or liabilities. This helps to improve financial ratios (i.e. debt to net equity).

Finance "Soft Costs": 
A lease will typically allow you to include some or all of the expenses associated with the operating use i.e.; shipping, installation, insurance  service and maintenance, and even extended warranty costs etc

For a little further insight, check out a short article our CEO and founder wrote. It recently appeared in various Board of Trade and Chamber of Commerce newsletters and several community based business publications. It's titled; To Lease or Not To Lease?