Caledonia Products sample essay
There are a lot of factors that Caledonia must consider when they are thinking about buying versus leasing a property. Leasing brings many positive savings in a company; there are many incidentals that may come up while owning a property, such as the unexpected repairs. Leasing can help with long term savings for a company; it provides the comfort of trying new areas out. If Caledonia starts to branch out, opens up new locations in different states, leasing the building will be a lot smarter of an idea than it would be to buy.
Not knowing how well the company will do in that state, will provide tons of savings if things do not go as planned. Along with saving during the long term, Caledonia will be saving in overall taxes. However, if Caledonia has owned a previous leasing site and business is moving. It will be smart for them to go ahead and buy some property. They will be able to save in the long run with owning instead of leasing, because this location will be considered a long term.
While owning the site, doing renovations to the building will never be an issue. You will not have to go through the hassle of a third party to the store/ property up to standards to the market. There is already a process with getting permits pulled and getting construction sites up to code. Depending on the overall move that Caledonia wants to go in will have to be based off of their initial plan on getting more property. As mentioned there are many different pro’s and con’s on why either leasing or buying can be considered an option.
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