🔁 Lease It to Yourself? How to Rent Your Own Building to Your Business ✅

🔁 Lease It to Yourself? How to Rent Your Own Building to Your Business ✅

🏢 Owner-Occupied CRE Strategy: Leasing to Your Own Business Explained 💼

❓ Can I Lease My Own Building to My Business? Here's What You Need to Know

Many business owners eventually ask the question: “Can I lease my own building to my company?”
The answer is yes—and when done properly, it can be one of the smartest real estate strategies for wealth building, asset protection, and tax planning.

Let’s break down how it works, the benefits, and what to watch out for.

✅ What Does It Mean to Lease a Building to Your Business?

In simple terms, you (the individual or entity) own the commercial property personally or through a holding company, like an LLC. Then, your operating business becomes the tenant, signing a lease and paying rent.

This strategy is commonly used with medical offices, retail stores, professional practices, and warehouses.

💼 Key Benefits of Leasing to Your Own Business

1. Build Equity in Your Commercial Property
Instead of paying rent to a landlord, you're investing in your own asset. As the property appreciates, so does your net worth.

2. Tax Deductions & Depreciation
Your business can deduct rent payments as an expense. Meanwhile, the ownership entity may benefit from depreciation, interest write-offs, and other tax strategies.

3. Asset Protection & Legal Separation
Separating your business from the property helps protect both. If your business faces legal issues, your real estate remains shielded under the property-holding entity.

4. Exit Strategy or Retirement Plan
When it’s time to sell the business, you can keep the building and lease it to the new owner—or sell both together at a premium.

⚠️ Things to Watch Out For

1. Fair Market Rent Is Critical
If the IRS determines you're undercharging or overcharging rent to yourself, it could trigger penalties. Make sure rent is aligned with comparable properties.

2. Separate Entities Are a Must
You need to create two legally distinct entities: one that owns the property, and one that operates the business. Commingling funds or ignoring legal separation can negate the benefits.

3. Loan Terms May Matter
Some commercial loans (especially SBA 504 and 7a) require that the owner-occupied business uses at least 51% of the space. If you lease to yourself, make sure you’re meeting all lender requirements.

🧩 When Leasing to Yourself Makes the Most Sense

·         You’re profitable and want to improve tax efficiency

·         You’re planning to stay in the space for the long term

·         You want to retain control over your operating location

·         You’re preparing for a business sale or succession

🏁 Final Thoughts

Leasing your own building to your business is a smart real estate play when structured correctly. It turns your rent payments into wealth, gives you long-term control, and opens the door to advanced tax planning strategies.

Whether you're a doctor buying a medical office, a contractor setting up shop, or a retail business looking to invest in yourself—this move could be your game-changer.

Need help structuring the right deal?
Let’s talk—We help business owners across Houston, Katy, and Fulshear secure financing and broker the best CRE deals tailored to owner-occupied success.

https://www.houstonrealestatebrokerage.com/

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https://www.commercialexchange.com/agent/653bf5593e3a3e1dcec275a6

http://expressoffers.com/[email protected]

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© 2023-2024 Bill Rapp, Broker Associate, eXp Commercial Viking Enterprise Team