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Buy vs. Lease Commercial Property in Florida
Leasing keeps cash free and makes it easy to move. Buying builds equity and gives you control over the space and your occupancy costs. With an SBA 504, Florida business owners can typically buy with 10% down.
Buying vs. Leasing Your Florida Business Space
| Factor | Buy With an SBA 504 | Lease |
|---|---|---|
| Cash upfront | Typically 10% down. 15% for businesses under 2 years old or special-purpose properties, 20% if both apply. | Security deposit and any first or last month's rent the landlord requires |
| Monthly cost | Loan payments, plus property taxes, insurance, and maintenance | Rent, plus any taxes, insurance, and maintenance passed through by the lease |
| How costs change | SBA portion is fixed for the full term. Bank portion follows the bank's terms. | Set by the lease, often with scheduled increases and renegotiation at renewal |
| Equity | Each payment reduces principal on a building you own | None |
| Control of the space | You decide on renovations, signage, and buildout, subject to local codes | Changes usually need landlord approval |
| Flexibility to move | Lower. Moving usually means selling the building. | Higher, once the lease term ends |
| Extra space | You can lease space you don't use, as long as your business occupies at least 51% of an existing building or 60% of new construction | Subleasing usually requires landlord consent |
| Tax treatment | Interest and depreciation are generally deductible. Commercial buildings depreciate over 39 years. | Rent is generally deductible as a business expense |
| Florida sales tax | Not applicable | Repealed for commercial rent starting October 1, 2025 |
| At the end | You own the building and keep any appreciation, or take any loss | Renew, renegotiate, or move |
Lease terms vary by landlord and lease type. Talk with your CPA about tax treatment for your business.
Sources: SBA 504 loans (SBA.gov), IRS Publication 946, and Florida HB 7031 summary (Shutts & Bowen).
What Would Owning Cost Compared to Your Rent?
Enter a building price and your current rent. The calculator estimates a monthly 504 loan payment so you can compare it with what you pay now.
The bank rate shown is an example. Replace it with your bank's quote. The 504 rate is FBDC's published October 2026 25-year rate.
Estimate assumes 10% down, the bank's 50% and the SBA's 40% each amortized over 25 years, and SBA fees of about 2.17% financed into the SBA portion. It doesn't include property taxes, insurance, or maintenance, which owners pay and many tenants also pay under the lease.
Get Your Real NumbersWhat's Different When You Buy or Lease in Florida
No More Sales Tax on Rent
Florida was the only state that charged sales tax on commercial rent. HB 7031 repealed it, including local surtaxes, for rental periods starting October 1, 2025.
Property Insurance
Owners carry property insurance, which is a significant cost in Florida. Many tenants on net leases already reimburse it through the lease.
Property Taxes
Owners pay property taxes directly. Florida limits annual assessment increases on non-homestead property to 10%, excluding school district taxes.
Signs It's Time to Buy, and Reasons to Keep Leasing
The decision usually comes down to how long you'll stay, how stable your space needs are, and what you want your cash doing.
You may be ready to buy if
- Your business has a steady track record and plans to stay in the area
- Your space needs are stable for the foreseeable future
- Your lease renewal is coming with a rent increase
- You want to stop paying for your landlord's equity
- Your current landlord is willing to sell the building
Leasing may still be the better fit if
- You're likely to outgrow or downsize your space soon
- Your business is early and needs cash for operations
- The location matters more than owning, and nothing is for sale there
- Your lease terms are below what ownership would cost
- You don't want to manage a building
Buy Your Building With About 10% Down
An SBA 504 splits the purchase between a bank or credit union and FBDC, so you bring a smaller share to closing than most conventional loans require.
SBA 504 Structure
See What Owning Would Cost Before You Sign
Send us your current rent and a Florida property you're considering. We'll show you the down payment, an estimated payment, and whether your business qualifies for a 504.
- Rent vs. ownership comparison
- Down payment and structure estimate
- Current 504 rate for your term
- No cost and no obligation
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Reach our team directly or send us your project details.
Buying vs. Leasing Commercial Property in Florida: FAQs
Is it cheaper to buy or lease commercial property in Florida?
It depends on how your rent compares with a loan payment, how long you'll stay, and the property taxes, insurance, and maintenance you'd carry as an owner. Buying takes more cash upfront but builds equity. Leasing keeps cash free but builds none. The rent vs. own calculator on this page gives you a starting comparison.
Do Florida businesses still pay sales tax on commercial rent?
No. Florida HB 7031 repealed the state sales tax and local surtaxes on commercial rent for rental periods starting October 1, 2025. Rent for periods before that date is still taxable, even if it's paid later.
How much do I need to buy a commercial building with an SBA 504?
Typically 10% of the project cost. It's 15% for businesses under 2 years old or special-purpose properties, and 20% if both apply. On a $1,500,000 building at 10%, that's $150,000. SBA fees are financed into the loan rather than paid at closing.
Can I buy the building I'm leasing now?
Yes, if the owner is willing to sell and your business will occupy at least 51% of the building. An SBA 504 can finance the purchase of an existing building your business already uses.
Can I lease out part of a building I buy with a 504?
Yes. You can lease space your business doesn't use, as long as your business occupies at least 51% of an existing building or 60% of a newly constructed one.
Is renting or owning better for taxes?
Rent is generally deductible as a business expense. Owners can generally deduct mortgage interest, property taxes, and depreciation, with commercial buildings depreciated over 39 years. Which works out better depends on your business, so review it with your CPA.
What costs do building owners pay that tenants might not?
Owners pay property taxes, insurance, maintenance, and major repairs like roofs and HVAC systems. On a net lease, tenants often reimburse many of these already. On a gross lease, the landlord covers them and builds them into the rent.
How long does it take to buy a building with an SBA 504?
Most FBDC 504 loans close within 60 to 90 days of starting the process. If your lease is ending, start early so the purchase can close before your move-out date. See our process for each step.
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FBDC is a private, non-profit Certified Development Company established in 1989 to administer the Small Business Administration (SBA) 504 Loan Program. In addition to the 504 Loan Program, FBDC is active in the economic development in the community in which it serves.