Decision Lab · Own vs Lease
Should My Business Own or Lease Its Premises?
Compare the financial position of leasing versus owning business premises on a present-value cost basis over your horizon — while keeping operational considerations such as flexibility, expansion, licensing and access visible alongside the numbers.
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Best Real Estate Agent – Dubai
Arabian Property Awards Winner 2026–2027
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20+ Years
Entrepreneurial experience
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Licensed REALTOR®
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Founder & CEO — FIMCO Real Estate
2,500+ personal advisory clients · 15+ countries
Commercial Own vs Lease Calculator
For business premises — should the business commit capital to own, or preserve capital and lease? Compared in present-value terms.
How to use this calculator
- 01Enter both optionsPurchase terms and the lease alternative.
- 02Set the assumptionsFinance, escalation, discount rate and horizon.
- 03Read the PV costOwn vs lease compared in present-value terms.
- 04Weigh capital & flexibilityThe financial result is only part of it.
Results
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Capital committed vs capital preserved
The financial result is only part of it — weigh the present-value saving against how the business needs to use its capital and space.
Own
Commit capital, build an asset
- Down payment & acquisition cost upfront
- Mortgage builds equity in a residual asset
- Full control to adapt the premises
- Less flexibility to relocate quickly
Best when
Stable, long-term occupancy
Lease
Preserve capital, stay flexible
- Capital stays free for the business
- Rent, exposed to escalation at renewal
- No asset upside — occupancy cost only
- Easier to relocate or resize
Best when
Growth & flexibility matter
Own or lease — decide on strategy, not habit.
The present-value result is the starting point. Weighed against your capital, growth plans and how the business uses its space, the right answer becomes a strategy — not a default.
Methodology, assumptions & sources
Show methodology, assumptions & official sources
Method & assumptions
Leasing and owning are compared as the present-value cost of occupancy over your occupancy horizon, discounted monthly at the Business Capital Opportunity Rate (r_monthly = (1+annual)^(1/12) − 1). Leasing PV includes initial costs (brokerage, admin, fit-out, deposit), rent with escalation and occupancy costs, and end-of-lease costs less the refundable deposit returned. Owning PV includes the down payment or full price, DLD (flat 4%), brokerage, mortgage setup and any unrecoverable VAT, then mortgage payments (interest and principal separated), ownership operating costs and any ground lease, less the discounted terminal equity (appreciated value − exit costs − outstanding mortgage — never deducting principal twice). A positive PV difference means owning is the lower-cost occupancy option. Break-even year, rent, purchase price, appreciation and mortgage rate are solved on the same monthly model; operational factors are counted by rule and never change the numbers.
- Registration / DLD is a flat 4%; mortgage registration 0.25% of the loan; commercial mortgage values are planning assumptions, not regulatory limits.
- Annual land / ground lease continues as an ownership cost even after the mortgage is repaid (non-freehold tenure); renewal is never assumed automatically.
- VAT is not auto-applied to labour accommodation or bare land; the refundable deposit is a timed cash flow, not a sunk cost. Corporate tax, lease-accounting and depreciation are excluded.
Official regulatory basis
Official government & regulatory sources
- Central Bank of the UAEMortgage lending framework — applicable LTV, debt-burden ratio and maximum-tenor regulatory limits where relevant to the model.View CBUAE source
- Dubai Land DepartmentOfficial Dubai property registration, mortgage registration, trustee / service-partner charges, title deed and unified map government fees.View DLD source
- Federal Tax Authority (UAE)Value Added Tax basis: the 5% standard rate applied to commercial property and to taxable fees (e.g. bank processing), and input-tax recovery — recoverable in full where it relates to a taxable supply. Residential leases and second-hand residential sales are treated per FTA rules.View FTA VAT source
Formulas & methodology
- Raj Khaleel Decision Lab methodologyStandard reducing-balance mortgage amortisation, renter opportunity-cost logic, equity modelling and the year-by-year comparison — implemented transparently in this tool.
- Commercial costs are your editable assumptionsBrokerage, bank arrangement, valuation, conveyancing and insurance are not government-set. Enter your actual quote or use the clearly-labelled editable planning assumption — these are not official government charges.
This calculator is for educational and scenario-planning purposes only. It does not guarantee property appreciation, lease escalation, commercial mortgage approval, VAT recovery, resale liquidity, tenure renewal, licensing approval, infrastructure availability or future business requirements. Before purchasing or leasing commercial premises, verify title and tenure rights, zoning and licensing, lease terms, VAT treatment, financing, property condition, service charges, power and access requirements, transaction costs and your working-capital needs.
Decision tools by Raj Khaleel — Best Real Estate Agent – Dubai, Arabian Property Awards Winner 2026–2027.