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Unread 06-05-2013, 12:22 PM   #196
marubozo
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Quote:
Originally Posted by willbird View Post
The problem with buying as I understand it (and only a little) is that buying property is paid for with after tax money, LEASING property is paid for with pre tax money ?

Bill
Not entirely the case. It's true that if you go and buy a place and pay cash, yes, you're using after tax money for the purchase. But most of the time you don't pay in full with cash and it's largely financed. So, those monthly payments are going to have tax deductions for the loan interest, property taxes, etc. With a lease you can deduct the entire amount since there's no principal repayment component.

But the main benefit other than a few dollars here and there for tax deductions is building equity with other people's money. If the business fails after a year and you've been paying $1,500/month rent, what do you have when you close the doors? Nothing as far as the building is concerned. What if you stay in business for 10 years and are successful? Again, even if you did decide to sell or get out, you've paid $180,000 to a landlord for occupancy, and walk away with nothing. Buy the place, put $25k down and let the business income pay off the mortgage for you. 10 years later it's paid off, you only invested $25k of your own money, but have an asset worth $180,000. That's $173,000 profit in your pocket vs. leasing. (numbers are just for illustration purposes)

There are obviously exceptions to the rule, but around here it's usually cheaper, or at least not much more expensive to buy. And that's a no-brainer since that means everything you do to improve the building and pay off the loan means ultimately, most of that money will eventually find its way back into your pocket rather than lining the pockets of a landlord.

Quote:
Originally Posted by canoe View Post
have you thought of staining the concrete pad rather than installing a floating floor? It will last longer and can be easier to clean.
I'm doing that in the kitchen. It has some awful linoleum tiles in rough shape, so we're stripping that down and just staining the concrete, which was actually suggested by the health department as well.

But for the dining area it's a small expense to put in good looking laminate wood flooring. Looking at just $1,500 in materials, and it will be pretty much just easier to clean. And that's a small price to pay for something that will significantly improve the look of the dining room and give it a nice and warm feel.
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