Owning vs Renting a Factory: What’s Right for Your Business
Deciding whether to own or rent your factory can have a major impact on your long-term finances and business flexibility.
Benefits of Owning: Owning allows you to build equity, customise the space, and benefit from property appreciation. It also offers tax advantages through deductions on interest, depreciation, and maintenance. Ownership provides long-term stability, potentially lower costs over time, and leaves you with a valuable asset — whether for ongoing use, rental income, or sale.
Benefits of Renting: Renting requires less upfront capital, offers location flexibility, conserves funds for other business needs, and limits exposure to market and interest rate risks.
Can You Afford It? If you’re paying $200/sqm in rent for a 200sqm factory ($40,000/year), that’s equivalent to a $506,000 loan with $3,333/month repayments. With a 30% deposit, you’d be looking at a $725,000 purchase. Every extra $100,000 borrowed adds roughly $660/month. Deposits might come from savings, equity, business profits, or super via an SMSF.
Market Trends: Factory values in Sydney rose from $250–$500k in 2004 to $800k–$1.2M in 2024. If you’re renting now, think about where you’ll be financially by 2045.
General info only — seek tailored advice.
Finlease
Michael Ryan michael@finlease.com.au
