Many business owners are always facing the dilemma of whether to buy or rent a warehouse. Although there’s no right answer if you should find a rent to own warehouse, since there are pros and cons with both.
Regarding this, we’ll discuss how renting to own works and what major benefits it offers to business owners. Continue reading to learn more about why you should get a rent-to-own warehouse.
Rent-to-Own Warehouse Agreement: How It Works
A rent-to-own warehouse is a scheme that enables buyers to lease a property with an option to buy. It’s an agreement between the owner and the potential buyer where the buyer rents the property for a specific period of time and is given the ability to buy it before the term runs out.
Business owners — as the buyers — will have to pay an upfront fee for the right to buy the warehouse for a predetermined price when the lease ends. In addition to this, a portion of the rent paid by buyers goes for the purchase’s down payment.
Types of Rent-to-Own Warehouse Agreements
There are two types of agreements you can get into:
- Rent-to-Own Contract: This is a lease purchase where a contract states the legal obligation of the buyer in purchasing the warehouse at the end of the lease.
- Lease Agreement With Purchase Option: This is an agreement where the buyer is legally allowed to purchase the warehouse at the end of the lease. Unlike the other type, business owners aren’t obligated to buy the warehouse.
Process of Renting to Own a Warehouse
Here’s how a rent to own warehouse setup proceeds for business owners like you:
1. Zoning of the Warehouse Location
Once you’ve decided on an area, determine if your business is allowed in there. You can do this by contacting and inquiring at a zoning department.
2. Check Property Features
It’s crucial to check if the features of the warehouse are to your liking and needs. See if the structure, design, and size correspond to what your business needs.
3. Know Agreement Type and Terms
Determine what type of lease agreement you’ll be dealing with — specifically if they allow renting to own. Check for the price and fees you’d need to pay upfront and monthly.
4. Fulfill the Agreement
Once everything is cleared and agreed upon, sign the contract and make required payments. This is to legally start the rent-to-own warehouse agreement. Make sure that all warehouse details are mentioned in the contract before signing anything. Once the lease is up, you’ll be able to buy the warehouse.
However, before signing the contract, here are some tips you can follow:
- Choose the right terms.
- Make sure you understand the contract.
- Double check what conditions will make you lose the ability to buy the warehouse.
Depending on the agreement terms, you’ll usually have the maintenance responsibility for the repairs. Make sure to read about this or clarify it on the contract.
Rent-to-Own Warehouse Benefits
Here are some of the major advantages of a rent-to-own warehouse:
- Bad Credit Qualification: Even with a bad credit score, you can still buy the warehouse in the future while building your score throughout the agreement.
- Test Warehouse: You can use the warehouse first and see if there are any problems before committing to buying it. You can decide whether it’s fit for your business needs.
- Predetermined Purchase Price: Warehouse prices are constantly increasing, but with a rent-to-own agreement, you can get it for today’s price, and you’ll have the option to not continue if ever.
- Move Less: You’d be able to store your business resources in your preferred location while you’re still unable to buy the property. This results in moving warehouses to warehouses all the time.
Find a Warehouse to Buy Through Schwarz!
Renting then buying a warehouse is the best option for a business owner. However, it’s still best to learn how a rent to own warehouse setup works first to determine how to utilize it for your business. Schwarz Properties can find the best warehouse for your business in North Carolina, South Carolina, and Virginia! Visit our website or call (336) 625-6076 today!