Lease Vs. Own Analysis
Compare leasing vs. owning the same property over a hold period — including financing, tax benefits, expenses, and appreciation.
PROPERTY
OWN — FINANCING
LEASE & TAX
VERDICT
OWN
Owning saves $943,862 in NPV over 10 years.
Own
★ WINNER
Initial Equity$650,000
Annual Debt Service$155,455
Future Value (Year 10)$3,359,791
Equity at Exit$1,895,846
Equity Gain$1,245,846
NPV of Net Cost$1,253,974
Lease
Total Rent (10 yrs)$3,322,053
Starting Annual Rent$300,000
Initial Cash Outlay$0
FlexibilityHigh
Equity Built$0
NPV of Cost$2,197,836
Simplified comparison. Assumes 80% improvements depreciated over 39 years. Real analyses should factor in 1031 deferral opportunities, capex reserves, vacancy risk for sublease, opportunity cost of equity, and tax bracket changes over time.