Encyclopedia
Owner-user
A business that owns the property it occupies.
For example: A company buys its own warehouse instead of leasing. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you run an engineering firm paying rising rent. You buy a small office building, occupy most of it and lease the rest. Your mortgage payment builds equity instead of paying a landlord, and you control your space for the long run.
What I’d tell a friend
Owning your space can build wealth and give you control, but it ties up capital. Compare the full costs of owning and leasing before you decide.
Why it matters to you
Owning your space gives you control and builds equity, and no landlord can end your lease. But it ties up cash you could use in the business, and moving or expanding can mean selling first.
How to use it in your deal
Business owners should compare owning versus leasing over a realistic period, including down payment, financing, property taxes, insurance, maintenance, strata fees, and the opportunity cost of capital. Owning gives stability and control over improvements, but makes moving harder if the business grows or shrinks.
Many owners hold the property in a separate company and lease it to the operating company, which can help with liability and future sales; get legal and tax advice. Lenders may offer better terms to owner-users with strong businesses. Check zoning, power, loading and expansion potential before buying. Plan what happens if you outgrow the space; you could lease it out.
Owner-users often pay more than investors because they value control, which can make them strong buyers in a sale. If you're selling a strata unit, they're often your best market. Talk to an accountant before choosing the structure. Ask your accountant whether to hold the building in a separate company and how rent between the two companies should be set.
Mistakes I see
Ignoring opportunity cost. Buying space you'll outgrow. Skipping structure advice.
In BC and Vancouver
Tax rules under the Income Tax Act affect structure; zoning bylaws govern use.
Official sources: Income Tax Act (Justice Laws) · Local Government Act (BC Laws)
Why businesses buy
An owner-user buys a property mainly to occupy it. Benefits include control over the space, stable costs and building equity over time.
Owner-users often compete well against investors for smaller buildings, because they value the space for their own use.
What to weigh
Owning ties up cash that could be used in the business, and you take on repairs, vacancy in any extra space and the risk that your needs change.
Talk with your accountant about structure and tax, and look at financing options for owner-occupied property early.
Questions to ask before you sign
- Is owning cheaper than leasing?
- How long will I stay?
- How should I structure ownership?
- Can I lease it out later?
Keep reading
Related terms: Industrial strata, Sale-leaseback
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.