Owner-Occupier Decision Tool
Lease or buy?
Expose the assumptions.
Compare two premises that support the same business requirement. See cash outflow, debt remaining and modelled retained equity without a manufactured recommendation.
Decision horizon
Enter one comparable requirement.
Use assumptions for two premises that support the same operation.
10-year undiscounted scenario
Lease
- Starting annual occupancy cost
- $270,000
- Cumulative lease cash outflow
- $3,174,913
Ownership
- Upfront ownership cash
- $925,000
- Monthly mortgage payment
- $16,446
- Mortgage payments in period
- $1,973,506
- Cumulative operating and capital reserve
- $952,287
- Estimated property value at exit
- $3,000,000
- Estimated mortgage balance at exit
- $1,464,719
- Estimated net sale equity
- $1,415,281
- Modelled net ownership cost
- $2,435,513
Undiscounted cash-flow model. It excludes GST/HST, income tax, CCA, opportunity cost, financing fees not entered, refinancing, variable rates, unexpected capital, business downtime and transaction-specific adjustments. Property value growth is your assumption, not a Commercially forecast. Negative net sale equity represents an estimated shortfall.
How the model works
One horizon.
Two capital strategies.
Lease scenario. Rentable area is multiplied by base and additional rent. The entered growth rate is applied annually, then one-time fit-up and moving costs are added.
Ownership scenario. The model adds down payment, acquisition costs, mortgage payments and escalating ownership costs, then subtracts estimated sale equity after selling costs and debt.
Undiscounted comparison. Cash flows are not discounted to present value and capital has no assumed opportunity cost. Use the result to identify assumptions for a broker, lender, accountant and counsel—not to select a property.
Primary sources
Verify the decision
at property level.
This general-information tool is not a valuation, appraisal, lending decision, mortgage service, tax calculation, legal opinion or investment recommendation. Commercially does not supply interest rates or predict property appreciation.
BDC: buy or lease commercial space ↗ISED: Canada Small Business Financing Program FAQs ↗CRA: commercial real property sales and rentals ↗Read the Alberta lease-versus-buy guide →Read the owner-occupied acquisition guide →Compare live sale and lease opportunities →Calculator inputs remain in your browser and are not submitted to Commercially. Only a form you intentionally submit creates an inquiry.