In my opinion, leasing is usually a better option for most business owners than owning. Sometimes, local situations may justify owning. We all know stories about the small business owner who's real estate was in the path of growth and was bought out by a developer for substantial profit. The romance of owning real estate can be compelling and hindsight is 20-20. But in other circumstances real estate proved burdensome and inhibited the growth of their core business. A lesson can be learned from major corporations who rarely choose to own their buildings. Often they sell or sell and leaseback their real estate to get it off their books. Here are some of the reasons.

1. Leasing affords more flexibility to expand or contract. It's a lot easier to renegotiate lease terms than have to dispose of a building in a soft market.

2. Buying and selling real estate is a matter of market timing that professionals are better at than novices. Too often novices buy at the top of the market and sell at the bottom.

3. Business owners often make real estate buying or selling decisions based upon the needs of their business rather than the real estate market. One of the 2 will suffer.

4. The business may be neglected because of real estate management distractions. Real estate management is best done by professionals.

5. Selling a business may be more difficult if the buyer is required to buy the real estate as part of the transaction. The seller is negotiating on 2 fronts and one will have a diminished outcome.

6. Precious working capital is tied up in financing the real estate.

7. You can only write off interest expense (not amortization) on a mortgage while lease payments are 100% deductible.

8. You can end up with phantom, taxable income when selling a depreciated building.

9. You should be spending your time making your business great and not having to deal with the day-to-day maintenance and management headaches of owning a building. Let the landlord do it.

10. Income to asset based ratios are improved by not owning real estate, which may help public companies compare better to others in the same industry.