Leasing a Sports Facility: Pros & Cons
Leasing an existing facility can be an attractive option for those who want to start their sports business with lower upfront costs. However, it comes with its own set of challenges.
Pros of Leasing a Sports Facility
Lower Initial Investment – Leasing allows you to avoid the high construction costs associated with building a new facility.
Faster Time to Market – With an existing structure, you can start operations much sooner compared to building a facility from scratch.
Flexibility – Leasing gives you the ability to relocate if the market conditions change or if you outgrow the space.
Less Maintenance Responsibility – Depending on your lease agreement, the landlord may be responsible for major repairs and upkeep.
Cons of Leasing a Sports Facility
Limited Customization – You may be restricted in terms of how much you can modify the space to suit your needs.
Rent Increases – Lease rates can rise over time, affecting profitability.
Lack of Equity – Monthly rent payments do not build equity in the property, meaning you don’t gain an appreciating asset.
Potential Lease Restrictions – Some landlords impose restrictions on facility usage, branding, or operating hours.
Building a Sports Facility: Pros & Cons
If you have the capital and want complete control over your sports facility, building from scratch can be a lucrative long-term investment.
Pros of Building a Sports Facility
Full Customization – Design a facility tailored to your vision, including ideal layouts, amenities, and branding.
Long-Term Cost Savings – Although building costs are high, ownership eliminates lease expenses and can provide financial stability over time.
Equity Growth – As the property value increases, so does your investment.
Tax Benefits – Owning commercial real estate can come with tax advantages, such as depreciation and mortgage interest deductions.
Cons of Building a Sports Facility
High Initial Investment – Land acquisition, construction, permits, and equipment costs require significant capital.
Longer Development Timeline – Building a facility can take months or even years, delaying revenue generation.
Ongoing Maintenance Costs – As the owner, you are responsible for all repairs, renovations, and maintenance expenses.
Market Risks – If demand shifts or economic conditions change, owning a facility can be riskier than leasing.
