Commercial Property Buy vs Rent Calculator
Find your break-even point, upfront costs and 5-year equity position in 3 minutes — based on your actual business financials and the property you're considering.
Work out your numbers
How this calculator works
This calculator helps Australian business owners compare the true cost of buying vs renting commercial property. Enter your current monthly rent, business net profit or EBITDA, and the estimated purchase price of the property you're considering. You can also set the deposit percentage, expected commercial property interest rate, planned ownership period, and annual property costs.
Your results show estimated borrowing power (based on net profit multiplied by a serviceability factor), total cash needed upfront including stamp duty and legal fees, monthly ownership cost versus current rent, and equity built through principal reduction and capital appreciation over your chosen time horizon.
For personalised advice, book a free consultation or read our buy or rent decision guide.
What your buy vs rent results actually mean
Every number in the calculator is based on real commercial lending criteria — not rough estimates. Here’s how to read each output and what it means for your decision.
Borrowing power is calculated from your business net profit multiplied by a serviceability factor — typically 2.5× to 3.5× depending on the lender and how your business is structured. This is one of the things that surprises people most when they move from residential to commercial thinking. Your personal income is largely irrelevant. What matters is whether the business can service the debt. I’ve helped business owners with modest personal salaries buy significant commercial properties because their business financials stacked up. If your borrowing power looks lower than expected, it’s worth a conversation — there are lenders who assess this more generously than others.
Cash needed upfront includes your deposit, stamp duty (typically 3–5% of the purchase price depending on your state — use our stamp duty calculator for the exact figure), legal and conveyancing fees, and the lender’s valuation costs. A lot of first-time buyers focus on the deposit and forget these additional items. On an $800,000 property you could easily need $50,000–$70,000 on top of your deposit to get to settlement. Many of our clients use equity in their home to cover this gap rather than depleting business cash reserves.
Monthly ownership cost is your loan repayment plus the ongoing property costs — rates, insurance and maintenance — that you don’t pay as a tenant. Worth noting: part of every mortgage payment is principal reduction, which is effectively forced savings. Every dollar of rent you pay is gone. Every dollar of principal you repay is equity in your name. The monthly comparison in this calculator accounts for that difference.
Equity built over your chosen time horizon combines two things: the principal you’ve paid down on the loan, and the capital appreciation on the property itself. Commercial property in established locations has historically grown at 3–4% annually, though this varies significantly by property type and location. Our commercial property market insights section covers current conditions across major Australian cities if you want to research a specific market before committing to a location.
The break-even point is when your equity gains outweigh the additional upfront and ongoing costs of ownership compared to renting. If you’re planning to stay longer than the break-even timeline, buying almost always makes financial sense. Shorter than that, and renting may be smarter — or you need a different property at a different price point.
What to do with your results
If the numbers look compelling, the next step is getting a proper pre-assessment — not a rough estimate, but an actual review with lenders based on your financials. Commercial property pre-assessments typically take 48–72 hours once we have your documentation, and they give you a credible budget to take to agents and vendors. In commercial property, serious buyers have their finance sorted before they start shopping. Read more about the full process in our first-time commercial property buyers guide.
If the numbers don’t quite work, it’s worth understanding why before you dismiss buying altogether. The issue might be deposit size (could equity in another asset help?), property price (would a slightly lower price point change the equation significantly?), or how your business profit is presented (different lenders assess this differently). I’ve placed commercial property loans that three other brokers said weren’t possible — because knowing which lender suits which situation makes a significant difference.
If you’re considering buying through your SMSF, the numbers in this calculator won’t capture the full tax picture — super fund tax rates and the lease-back rules change the equation significantly. Our SMSF commercial property guide covers how to model that properly.
For the full decision framework — including when renting is genuinely the smarter choice, the tax advantages of buying, and how to structure a purchase — read our buy or rent decision guide.
This calculator is part of our Commercial Property Tools and Guides section.
Common questions about buying vs renting commercial property
How is my borrowing power calculated?
Commercial lending works differently from residential — lenders focus almost entirely on your business's ability to service the debt, not your personal income. The standard method is to take your net profit (or EBITDA) and multiply it by a serviceability factor, typically 2.5× to 3.5× depending on the lender and your business structure. This calculator uses 3.0× as a default for companies and trusts, 2.8× for partnerships, and 2.5× for sole traders — which reflects how most lenders actually assess each structure.
One thing that surprises people: two businesses with the same net profit can get very different borrowing results depending on how that profit is structured and which lender assesses it. I've had clients told they couldn't borrow enough by one lender, only to have a different lender assess them completely differently. The calculator gives you a reliable estimate — a real assessment from a broker gives you the actual number.
My monthly ownership cost is higher than my rent — does buying still make sense?
Often yes — and the calculator's net position figure is designed to answer exactly this. The monthly comparison alone doesn't tell the whole story. What it misses is that part of every mortgage repayment is principal reduction — money going into your equity rather than someone else's pocket. Your rent, by contrast, builds nothing.
The relevant question isn't "is my mortgage cheaper than rent?" It's "over my planned holding period, am I better off financially owning or renting?" If the calculator shows a positive net position over your time horizon, buying likely makes sense even with a higher monthly outgoing — because you're building an asset that grows in value while also paying down the loan. The break-even point typically sits at 3–5 years for most scenarios I work through with clients.
Does the calculator include tax benefits of owning?
Not directly — and this means the numbers are actually conservative in favour of owning. As a business owner, the interest component of your commercial mortgage is generally tax deductible, as are depreciation, repairs, and a portion of other ownership costs. For owner-occupiers, these deductions can meaningfully reduce the real after-tax cost of ownership.
Factoring in tax properly requires knowing your marginal tax rate, your ownership structure, and how your accountant treats depreciation — variables that are specific to your situation. What I'd suggest: run the calculator to get the pre-tax picture, then discuss the tax overlay with your accountant. In most cases it only strengthens the case for buying.
Should I buy in my own name, through my company, or through an SMSF?
This is one of the most important decisions in the whole process, and the answer depends on your circumstances. Each structure has different tax treatment, asset protection implications, and lending criteria.
Buying personally or through a company gives you access to the widest lender panel and the most straightforward loan process. Buying through a trust can provide asset protection but some lenders assess trust income more conservatively. Buying through an SMSF offers significant long-term tax advantages — rental income is taxed at 15% inside super, and capital gains at just 10% if you hold the asset for over a year — but lending within an SMSF has stricter LVR requirements (typically 70% max) and fewer lenders available. Our SMSF commercial property guide covers this in detail. The structure question is worth settling before you start looking at properties — it affects your borrowing capacity, the deposit you'll need, and your long-term tax position.
What deposit do I actually need for a commercial property loan?
The typical minimum is 30% of the purchase price for most commercial property types, though this varies by property type, lender, and borrower profile. Industrial and medical properties often attract better LVRs (some lenders will go to 70–75% for these). Specialised properties like service stations, childcare centres, and hospitality venues typically require higher deposits — 35–40% is common.
What the calculator labels as "cash needed upfront" is your deposit plus stamp duty plus legal and other acquisition costs. For a $1M commercial property at 30% deposit, you're typically looking at $300,000 deposit plus $50,000–$60,000 in acquisition costs — meaning you need around $350,000–$360,000 in accessible funds before you approach a lender. Many of our clients use equity in their residential property to cover the gap rather than drawing down on business cash. Talk to our team about how to structure your deposit if liquid funds are the constraint.