There’s an idea in property investment that you should always buy and never rent. On first glance, there’s a lot to be said for this idea – ownership is generally a lot more profitable than leasing because when you’re done with whatever you’ve purchased, you can sell it, often for a profit. That said, there are certainly some advantages to leasing, especially if you don’t have the funds to buy a particular property outright. Leases can be cheaper, but can you profit from them? You can! There are a lot of different types of leases and the methods you can profit from them will vary from type to type and location to location, so we’re going to keep this guide pretty generic and look at two ways you can profit from your lease.
The first way to profit off your lease is subleasing, often called subletting when it comes to rental dwellings. You can profit off of subleasing by finding a lessee who is willing to pay more than you are for the property you’re leasing. For example, if you’re leasing a property in BC, you’re allowed to sublet it for a profit. The same is not necessarily true in all jurisdictions, however, and it’s certainly not true for all properties. Subleasing a car for profit is practically impossible in Canada because only the dealership is allowed to lease the car; the lessee has no right to sublease.
That doesn’t necessarily mean you can’t make money off of the car you leased, however. Provided your contract allows for it, someone else could drive it and that person could pay you money for use of the vehicle. That said, the lease is still in your name but if you don’t receive payment, there’s little legal recourse for you, as you have no right to sublease.
As we mentioned at the top, leasing is almost always cheaper than buying a particular property. That means you’ve got more money left in your pocket – money you could use in order to invest in something else. This can be particularly handy for depreciating assets like cars. If it’s cheaper to lease, you’re investing the rest of the money into something that (hopefully) appreciates. This logic can even hold true with classically appreciating properties like housing if you predict that the markets you’ll invest in with your savings will produce greater returns for you than purchasing the property would.
Knowing when you should lease, when you should buy, and which choice will end up best for your bottom line can be pretty hard to suss out on your own. Fortunately, you can get a CPA accountant in Winnipeg who can help you make all of those decisions. Abandon the idea that leasing is never the right decision. Instead, speak to an accountant who can help give you all the facts about leasing versus buying outright.