An iconic venue familiar to many Atlantans appears to be moving. Smiths Olde Bar, known for hosting great bands, has been ordered to vacate their premises due to the building being placed on the market to sell. This highlights a conversation that many small business owners often choose to ignore. Leasing space vs Owning their property.
Owning the property that your business utilizes can be a great win for your personal wealth building and tax management.
A familiar dilemma that faces many start up businesses is knowing where to place their business and exactly how much space they will need. I certainly recognize the challenge here. Once these items have been ironed out; I encourage a business owner to begin taking steps to own the property that they inhabit. If you have never been through this process before I would encourage you to work with a well healed business consultant/ financial professional to help guide you through the process.
- How to Own the Property – Likely in a Limited Liability Corporation (LLC) for asset protection
- Consider a Cost Segregation Study – This allows you to properly manage the depreciation on the property. Creating potentially significant tax savings.
- Pay Yourself Rent – Another way to create tax advantages within your business.
- Avoid Paying Someone Else Rent! – This is a big one. Most importantly you maintain control over your business. Watch The Smiths Olde Bar Story.
- Retirement Planning – This property could become an income stream that funds your retirement, whether you own the business or not during that time of your life.
- Estate Planning – Owning Real Estate has advantages when you consider techniques to manage and mitigate Estate Taxes.
Business Owners, I encourage you to address the issue of your business and the real estate that it inhabits. Whether you are currently in a position to own or not, begin taking the proper steps today. You will be glad that you did!
Please follow Todd Burkhalter and Drive Planning for ideas like this and many others which will enhance your personal net worth and your business’ value.