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Is It Time To Fire Your Landlord?

Control Your Costs With An Owner-Occupied Commercial Mortgage

Taking care of business means controlling those things that affect your bottom line. After payroll and income taxes, real estate rental costs are usually the third largest business expense, increasing on average 3% per year, every year. If you are paying someone else rent, it might be time to consider the move toward ownership and converting that large, consistently growing expense into an investment with many advantages. Owning, as opposed to renting, can provide tax incentives, allow more control with overhead costs, and help you build equity for yourself, rather than your landlord.

Ownership allows other benefits to accrue, including the ability to employ advantageous tax strategies. Interest deductions, depreciation, amortization, 1031 exchanges and other benefits can help you keep more of what you earn. It can also provide an income stream in perpetuity, asset diversification, and control of the property’s tenancy. As an owner, other overhead costs, such as utilities and maintenance can also be better managed.

A long-term advantage of ownership is the number of exit strategies it offers when retirement day comes. These options include selling the business and leasing the property back to the business, thereby continuing an income stream; selling the business with the property, increasing the business value and making the transaction easier to finance; or selling the business and the property to different buyers.

While jumping into the commercial real estate ring might be intimidating, the above advantages, coupled with currently low interest rates on loans might be good incentive to consider the leap. (It is advised that you speak with legal and tax professionals to determine if ownership is right for you and your business.) If you do decide to become your own landlord, an owner-occupied commercial mortgage is an ideal way to finance the purchase.

An owner-occupied commercial mortgage can be used for acquisition or, if you already own your facility, for expansion or to refinance. Unlike a multi-year lease that typically contains escalating rent clauses, these loans offer the security of stable monthly payments that won't increase during the term of the loan.

Because every situation is different, First Community Bank and Trust offers flexible loan products and programs customized to meet the unique needs of each transaction and client. We understand the intricacies of commercial financing and can help navigate through the loan process toward a successful outcome. A properly structured loan can literally be the difference between success and failure. And even if ownership isn't right for you at this time, we offer other business loan products that can help your business grow. For more information about our line of commercial loan products, call Tom Burton, Senior Vice President of Lending, at First Community Bank and Trust, 708/946-2246.

About First Community Bank and Trust
First Community Bank and Trust is a privately owned bank. Established in 1916 First Community Bank and Trust has been serving Beecher, IL, Peotone, IL and the surrounding communities for over 99 years. Our commitment to providing the best banking products and services is matched only by our outstanding customer service. We offer traditional community banking services, including mortgage, consumer, and commercial lending, as well as state of the art electronic banking services.

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Press Contact:
Steven D. Koehn, VP
First Community Bank and Trust
(708) 946-2246