Pet Care Facility Real Estate: Buying the Property vs. Leasing
Finding a location that works for a pet care business is not easy. Zoning may limit where animal services are permitted, neighbors may be sensitive to noise, and the building needs drainage, ventilation and sometimes outdoor space suited to animals. Once a business has a location that works, the question of whether to own or lease it becomes important. Pet care facility real estate decisions affect the size of the investment, long-term control of the location and how the acquisition is financed. Our page on pet care facility real estate financing describes how we help owners purchase existing properties.
This article compares purchasing an existing property used for a pet care business with acquiring the business while leasing its location. It does not address construction or new development. Zoning, permitted-use, noise and outdoor-area requirements vary by location, and this is not legal, zoning, tax or real estate advice.
Why the Location Matters So Much
- Zoning and permitted use may limit where pet care businesses can operate
- Facilities are often configured specifically for animals, with specialized drainage, flooring and ventilation
- Outdoor play or exercise areas may be subject to local rules
- Pet owners choose businesses that are convenient to home or work
- Relocating can be costly and may require new approvals
Acquiring the Business and Leasing the Location
Advantages
- A smaller total investment and down payment
- Capital remains available for staffing, improvements or working capital
- Depending on the lease, the landlord may handle certain building repairs
- More flexibility if the business outgrows the space
Risks
- Dependence on the landlord’s willingness to assign, extend or renew
- Rent increases at renewal
- Lease provisions that may restrict noise, outdoor use or hours
- Limited control over building improvements
Our guide to the pet care facility lease covers the specific lease terms buyers and lenders review.
Purchasing the Business and the Property
Advantages
- Removes lease renewal and landlord risk
- Fixed-rate financing can make occupancy costs more predictable than rent
- Control over improvements, outdoor areas and the long-term location
- Loan payments build equity in the property over time
Risks
- A larger investment and down payment
- Responsibility for the roof, systems, drainage, fencing and maintenance
- Property taxes and insurance
- Less flexibility to relocate
Reviewing an Existing Property
- Zoning and permitted use: confirm the current operation is permitted and understand any conditions
- Permitted capacity: the number of animals the property can serve may depend on licenses, zoning, facility configuration and local requirements, not physical space alone
- Noise and neighbors: any history of complaints or conditions related to noise
- Building condition: drainage, flooring, HVAC and ventilation, roof and fencing
- Appraisal, title and survey: confirming value, ownership, boundaries and easements
- Environmental review: depending on the property and lender, an environmental assessment may be required
Requirements vary by location, so buyers should rely on qualified professionals to evaluate a specific property.
Financing the Purchase of an Existing Property
When the buyer will occupy the property, owner-occupied commercial real estate financing may be available. Options can include SBA 7(a) business real estate loans, which can finance the business and property together, the SBA 504 business real estate loan for owner-occupied property, and conventional real estate loans. Eligibility, occupancy requirements and terms vary by program and lender, and the property is typically appraised separately from the business.
Use our conventional loan calculator to compare estimated property payments with current rent.
Ownership Structure
Many owners hold real estate in a separate company that leases it to the operating business. This can affect taxes, liability and a future sale, so discuss structure with legal and tax advisors before closing.
Making the Decision
Neither approach is universally better. Leasing keeps the investment smaller and preserves flexibility, while owning provides long-term control of a location that may be difficult to replace. The right choice depends on the property, the terms available, your capital and how long you plan to operate there.
US Professional Funding works with buyers acquiring existing pet care businesses, with or without the real estate, and can help compare financing options for each approach.
