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This picture helps in understanding how buying is better over leasing by comparing five years of both buying and leasing. For leasing the rate is given as 4.99% and this picture also provides the total amount of deductions and tax savings for both buying and leasing at the end of the fifth year.

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This image clearly specifies the differences of buying over leasing. At the first, buying may be found as expensive but in a long run it will be considered to be an asset. Therefore, it is very clear clear that buying is the best option over leasing.

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This video specifies the differences between buying and leasing and how it affects the balance sheet. Buying can be stated as obtaining something for payment whereas leasing means taking something for rent. When we buy something for money, it will always be on the asset side of the balance sheet whereas in the time of leasing it will be the liability side of the balance sheet as we are owing something to the one from whom we were leasing.
One of the main pieces of information that I found useful from the video is the CCA tax shield. When we buying something for money we will be having a CCA tax shield on the asset side of the balance sheet. Instead, if we're leasing it we will not be having the CCA tax shield. Tax shield can be defined as the reduction in taxable income for an individual achieved through claiming allowable deductions such as depreciation, mortgage interest, medical expense, etc.

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FIN 401 - Leasing vs. Buying - Ryerson University

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This video clear specifies the things to be considered while making the lease or buy decisions. While making a buying a buying decision the first things to be considered are the purchase price of the product, tax-saving on WDA's, and the residual value of the product. While making the leasing decisions, the things to be considered are the lease payments (usually in advance) and tax savings on those lease payments. Also while making the decisions we need to use the POST-Tax cost of Borrowing to evaluate both.
The one thing that I found most interesting from this video is the POST-Tax cost of borrowing. It can be defined as the interest paid on debt less any income tax savings due to deductible interest expenses. The formula for POST-Tax cost of borrowing is:

Post-tax cost of borrowing – Pre-tax cost of borrowing * (1-t), where ‘t’ equals tax.

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Here you will learn about buying vs leasing include tools to help you assess your rates, compare payment plans etc through websites, videos, and images. Buying is an action where we obtain something by exchanging equivalent money. Leasing is a contract outlining the terms under which one party agrees to rent a property owned by another party.

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Here you will learn about buying vs leasing include tools to help you assess your rates, compare payment plans etc through websites, videos, and images. Buying is an action where we obtain something by exchanging equivalent money. Leasing is a contract outlining the terms under which one party agrees to rent a property owned by another party.

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This website explains the two financial options which are buying and leasing. Generally, people have two financial options when it comes to obtaining an asset for them. And like anything in finance, these two monetary alternatives each have their advantages and disadvantages. The below mentioned website investigate what each option involves. It compares both actions (buying vs leasing) based on pros and cons of both buying and leasing. Also describes tax implications of both.

We chose this website as it contains facts about
buying vs leasing which helps people to find the better option based on their
financial position and individual circumstances.

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Business owners have two financial options when it comes to obtaining an asset for their company. And like anything in finance, these two monetary alternatives each have their advantages and disadvantages.

Let's look into what each option involves:
Buying
When you purchase something from a seller, you officially own the item (or the bank does if you have borrowed the money). Once the transaction has been made and the papers have been signed, the seller no longer has ownership over the asset.
Leasing
Leasing on the other hand is an agreement between the lessee (you) and the lessor. You have access to the asset, usually against periodic payments, but the lessor still has ownership over the item. After the completion of the lease, you often have the choice to hand the asset back, or transfer the ownership to you for a final lump payout.

So which option is the better alternative?

This is entirely dependent on your financial position and individual circumstances. Some assets also require regular services, repairs or inspection, therefore this must be taken into account when securing a deal.

We have noted down the pros and cons of both alternatives including their tax implications, so if you're sensing a big spend-up on the horizon, this analysis will help you to start thinking about which option might be best for you.

Lease Vs. Buy Analysis
Pros and cons of buying

If the asset in question is for long-term use, typically buying tends to be the cheapest option when it comes to out-of-pocket expenses.

Purchasing may be the better option for you if your business has the sufficient funds available to pay outright without interfering with your other financial obligations.

There is often room for flexible payment options when purchasing a product, such as bank loans or repayments.

Having ownership over an asset with a value that is predicted to rise can offer a great investment opportunity.

If your are purchasing a depreciating asset, it is worth thinking about just how much you are going to actually use it. If it's had very little benefit to you over the years, you could end up wasting a lot of money when it comes to selling it further down the line.

The cost of buying soon outweighs the cost of leasing if you find yourself repeatedly letting the asset for short-term periods.

If you do decide to buy the asset through the assistance of a loan, you also need to take into consideration any additional costs such as interest rates.

Pros and cons of leasing

Leasing frees up your capital for other, more important, purchases.

Leasing gives you access to the latest and greatest equipment, as and when it becomes available on the market.

The leasing supplier often carries out any services or repairs that are required, meaning future costs are predictable and you don't have to worry when things go wrong with the asset.

The downside to leasing is you don't actually own the asset. If you find yourself requiring the item again in the future, leasing can end up costing your company more in the long run.

Tax implications of buying
Purchasing will give you access to the following tax deductions:

Depreciation on the value of the vehicle. This is split over the life of the vehicle, which typically provides a better upfront benefit. However, the benefits of this diminish over time.

Running costs such as repairs and maintenance, insurances, registration, fuel etc.

Interest on the loan, if applicable.

Generally, we find buying is more beneficial in the short term for tax purposes but the benefits decrease over time.
Tax implications of leasing
Leasing gives you access to the following tax deductions:

The recurring lease repayments made.

Running costs such as repairs and maintenance, insurances, registration, fuel etc.

Leasing is generally more beneficial in splitting your tax deductions evenly over the life of the lease. Unlike depreciation, you tend to find the deductions stay constant year on year. However, you don't get the big upfront benefits.

Essentially, the lease vs. buy analysis is all about capital planning. Once you have calculated the after-tax value of each financial alternative, you will typically find one solution to be more beneficial for you and your company.

If you would like to discuss further which option is best for you, please call us today on 07 3367 3155.

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Business owners have two financial options when it comes to obtaining an asset for their company. And like anything in finance, these two monetary alternatives each have their advantages and disadvantages. Let's look into what each option involves: Buying When you purchase something from a seller, you officially own the item (or the bank does if you have borrowed the money).

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This website acts as a tool to find which option is best for an individual on their personalized details. This calculator to compare the costs to finance, lease, or lease/buyout a vehicle over time. The calculator will also show how much an individual can save if he/she start making monthly payments to them when their car loan is fully paid off.
We chose this website as it is authorized site,
and it has genuine information basis of law. We can trust this site than other
website because this belongs to the government. We found this site is easy to
find the better option for anyone by putting their real life buying or leasing
values in the specified columns on the website.

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Total Pre-Tax Selling Price

This is the total selling price of the car before taxes.

Trade-in

Enter the value that a dealer is giving you for your current vehicle. When trading in a vehicle, the final amount used to calculate the sales tax amount is lowered by the value of your trade-in.

Tax Rate

Enter the tax rate of any provincial sales tax (PST) and provincial or federal goods and services tax (GST), or any harmonized sales tax (HST).

Down Payment

Enter the down payment amount you will give the dealer.

Amount to Finance

This amount is calculated automatically from your inputs. It is the amount that you have to borrow from a bank or finance company to buy the vehicle.

Number of Months

Enter the number of months in the term of your loan.

Interest Rate

Enter the interest rate that the bank or finance company is charging you for financing your vehicle.

Monthly Payment with Taxes

This amount is calculated automatically from your inputs. It is the monthly payment amount that you must pay each month to the bank or finance company. When a vehicle is financed, the monthly payment includes taxes.

License, Registration, Other Non Taxable Items

Enter the amount it costs to license and register your vehicle. If necessary, include the annual fee for Personal Property and Security Act (PPSA), which is a small annual fee charged by some provincial governments to register a loan or a lease. This fee is known as Registre des droits personnels et réels mobiliers (RDPRM) in the province of Quebec.
Note: Dealers sometimes mark up these charges, so you may want to check with the provincial registry.
Amount Due On Delivery

This amount is calculated automatically from your inputs and is the amount due on delivery to the dealer. This amount completes the deal and must be paid before you get your vehicle.

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This is the total selling price of the car before taxes. Enter the value that a dealer is giving you for your current vehicle. When trading in a vehicle, the final amount used to calculate the sales tax amount is lowered by the value of your trade-in.

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This website consists an article regarding on going debate about buying vs leasing in the current Canadian market. This site will help people to decide lease vs buy a house.

With so many variables—personal and financial—in play, whether to rent or buy may well come down to the financial circumstances, future goals, and personality. This article outlines some of the considerations when deciding to rent or buy a home.

We selected this website as it describes benefits and downsides of buying and leasing with the current financial strategies in the market which helps people to understand their financial position and helps them to find the best option.

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Last Updated on

Once upon a time, buying a home in Canada was simply a milestone in the life of the average Canadian. But times have changed: prices have skyrocketed, and housing markets have exploded, particularly in Vancouver and Toronto, making homeownership difficult and calling the investment potential of real estate into question. Simultaneously, the surge of remote work situations and the shift to a global economy have made the portability of renting an attractive choice. It's left many Canadians with rent vs. buy debate.

With so many variables-personal and financial-in play, whether to rent or buy may well come down to your financial circumstances, future goals, and personality. This article outlines some of the considerations when deciding to rent or buy a home.

Benefits of Owning Your Own Home

There are a gazillion reasons why homeownership has serious appeal (not dealing with nosy landlords is definitely one of them). Here are some of the common benefits of owning your own home:

You build equity: When you make a mortgage payment, you build equity (the portion of your home that you truly own and isn't encumbered by a mortgage). So each monthly payment takes you one step closer to owning your own place - something renting can't give you.

It's generally a good investment: Homes usually go up in value, so if you buy a home within your budget, the payoff can be plenty down the line. The general rule is to hold onto a property for five years or longer in order to reap the full benefit of the home appreciation.

Stability: With a fixed-rate mortgage, your mortgage payment is predictable and more stable than renting (yes, your lovely landlord can hike the rent).

More privacy: There's no landlord policing your every move.

Downsides of Owning Your Own Home

Homeownership isn't all unicorns and rainbows. Here are some of the downsides to homeownership, which may sway you towards renting:

It's a commitment: You can't just sell your house overnight or break your mortgage on a whim (at least, not without a hefty penalty). Buying a home generally means you're sticking around for at least five years or longer.

Ongoing maintenance costs: When renting, your landlord is responsible for the upkeep of your home. But homeowners have to foot the bill for regular maintenance and repairs: whether it's replacing the roof once every ten years or fixing an exploding toilet, you're on the hook.

Mortgage payments can be higher: By and large, it's usually cheaper to rent than to pay for a mortgage. However, this depends heavily on your location.

ROI can be slow: It can take time for the value of your home to increase, so patience is essential. Don't expect an immediate return on investment.

Less disposable income: Homeowners take on considerable responsibility and debt, which may prevent them from investing elsewhere (in RRSPs or TFSAs, for example). In some cases, a homeowner may find themselves "house poor" - meaning a big part of their income goes towards the costs of homeownership, leaving little left over to pay for other needs and wants.

What are the Benefits of Renting?

It may not a popular opinion, but renting a home has some perks worth considering. Here are the pros of renting a home:

Cheaper: In general, rent payments tend to be lower than mortgage payments, and may cover other costs, such as utilities, hydro, cable, and internet.

Flexibility: In the era of Airbnb, renting gifts you the ultimate flexibility. Most leases are one year, but it's possible to score an agreement that's month-to-month. You may decide to get a short-term rental through a home-lending website. If you've got wanderlust or commitment-phobia, renting may work best for you.

Little or no maintenance: You don't have to shell out a wad of cash when the dishwasher breaks or the basement floods. Call your landlord instead!

Financial freedom: As a renter, you'll likely have more free cash to sink into investments and retirement planning.

The Downsides of Renting a Home

Let's be honest: there are some unappetizing things about renting. Here's are some not-so-great aspects to being a renter:

You're not building equity: While renters avoid taking out a mortgage and footing the bills for running a house (which can be big bucks), they also lose out on building equity. Instead, your monthly rent cheque goes towards paying someone else's mortgage.

The landlord is boss: We've all heard horror stories about deadbeat landlords and surprise eviction notices. Renting means you're living on someone else's turf - and they get to call the shots (within reason though...there are laws, after all).

Instability: In accordance with local laws, the landlord can hike the rent. A spike in your rent payment could trigger you to start packing - which is not only inconvenient but for cash-strapped people, could trigger a full-blown financial crisis.

Rent vs. Buy: How to Decide

Before you make the leap from renting to owning, it's wise to dig in and analyze your current financial situation and short-to-medium-term goals. We'll deal with specific financial considerations later; but first, survey your personal situation and readiness for homeownership first.

Where do you want to live?

The first (and most important) thing to do is to compare the cost of rent to mortgage payments in your neighbourhood. The housing market will exert significant influence on your decision-making. In "hot" housing markets like Vancouver and Toronto, the cost of a mortgage may be significantly higher than the amount you would pay in rent. As a general rule, if you're paying more than $3,000 per month in rent, you can probably do better on a mortgage.

Rent vs. Buy Calculator

One way to crunch the numbers is to use our rent vs. buy calculator.

Can you pass the 40 percent rule?

The "40 percent rule" says you should be able to meet your housing costs (principal and interest, taxes, and heat), as well as your other registered debts (such as car loans and credit cards) with no more than 40 percent of your gross income. Not only is this a handy guideline for your personal planning, but it's also a measure applied by many lenders. Relatedly, you should be able to cover monthly costs such as your housing, food, and transportation (known as "fixed costs") with 50 to 60 percent of your net monthly income. Any more than that, and you're likely to struggle.

How stable is your employment situation?

Without stable employment, you'll have trouble convincing a lender to give you a mortgage, but more importantly, you may run into problems meeting your obligations. Do a realistic survey of your employment picture before making a decision.

How long do you plan to live in your home?

With all the talk of investments and equity, it can be easy to lose sight of some basic truths. As a general rule, the longer you live in a place, the better the investment. This is partly due to the fact that there are numerous costs associated with the transfer of real estate.

Are you ready for the commitment?

Homeownership is a big step. It means that you're saying "yes" to forking over a chunk of change for property taxes, home insurance, maintenance, utilities, and a mortgage. Are you really ready for it?

When to Rent

You're not ready to put down roots, and your long-term plans are influx. If you're thinking about travelling, going back to school, changing careers, hit pause on your plans for homeownership.

You can't afford the mortgage payment and ongoing expenses that come with homeownership. Renting is a more affordable option and makes fiscal sense in the short-term.

You've got a mountain of debt. Focus on paying off your student loans, credit cards, car loan, or whatever else is bogging down your bank account. When you're back in the black, you'll be ready to approach a mortgage lender to talk about homeownership.

You don't have a down payment saved up. Stick with renting, and instead, set up an automated savings plan to a high-interest TFSA account. After a few years, you'll be golden.

You want to invest what you save. Renting will likely give you more wiggle room to make regular payments to a TFSA or RRSP investing account.

You have "precarious employment." If your job is temporary or you're self-employed, a mortgage loan often gets nervous. Your best bet is to spend a couple of years renting, saving up for a downpayment, and building up a proof of your income. That generally means being able to produce 2 years of tax returns from Canada Revenue Agency.

When to Buy

You're ready to settle down. You want a place to call home and you don't anticipate moving for at least 5 years or more.

You're (financially and emotionally) ready to take on the many costs associated with homeownership. We're talking about making your mortgage payments, but also things like utilities, repairs and maintenance, property taxes, home insurance, snow removal, condo fees, and so forth.

You're financially fit. You've got enough money saved for a down payment and to cover closing costs. You're debt-free (or almost debt-free) and have a chunk of change that you can put towards ongoing maintenance and property taxes. You're prepared to put your needs ahead of your wants, temporarily shelving plans like travel and buying the latest gadgets.

You've got a steady source of income. You're not planning on making an abrupt career change that could impact your income, or taking time off to explore other pursuits like travel. If you're self-employed, you have at least 2 years of CRA Notices of Assessment to show a mortgage lender that you've got a stream of income coming in the door.

How Much Does Home Ownership Cost?

If you're convinced that homeownership is for you, the next step is taking a detailed survey of the real financial obligations of homeownership. Use these guidelines to estimate the real financial responsibilities of buying a home.

Down payment: 5 to 20 percent
This is the standard amount you'll need to apply for a mortgage. If you put down less than 20% of the purchase price, you'll have to pay "CMHC insurance" - a mandatory mortgage default insurance policy for those who purchase a home with less than a 20% down payment.

Closing costs: 1.5 to 5 percent
This includes lawyer fees, appraisal fees, home inspection fees, and property tax adjustments.

Home insurance: $50 to $100 per month
A home is an enormous investment. You'll want to protect it.

Maintenance: 1 to 2 percent of your income annually
A new hot water heater, roof repairs, blown electrical circuits - you name it! Homes need regular, expert maintenance if they are going to be safe and efficient. Regular upkeep also protects your resale value.

A note for first-time homebuyers: Incentives like the RRSP Home Buyer's Plan, the First Time Home Buyer's Tax Credit, and the Land Transfer Tax Rebate can all save you a bundle.

Is Homeownership a Good Investment?

If you have the resources to buy, homeownership is more than likely a smart investment. Every time you make a mortgage payment, you are essentially paying down the principal and taking a step towards owning a piece of property that will appreciate over time. Think of your mortgage payment as an investment or a savings strategy: if you sell your house down the road, you'll not only get back the money you've paid out but also likely turn a profit. If you stay put long enough, this can grow into a very healthy nest egg.

Of course, there are no guarantees and even buying a house comes with risks. In the past, CMHC has warned about overvaluation in certain areas of Canada's housing market, but for the most part, buying a house in Canada is a safe bet. Just make sure to buy within your budget and plan to hold onto the place for more than five years.

Verdict: Is It Better to Rent or Own a House?

When it comes to renting vs. buying a house, neither is better than the other. There's no clear-cut answer to this age-old debate, and it's going to require some soul-searching and number-crunching on your part. Your current personal and financial situation, as well as your goals and location, will largely determine what's right for you. Use our rent vs. buy calculator to see which option makes fiscal sense.

If you decide to take the plunge into homeownership, remember to shop around for the best mortgage lender and get the lowest mortgage interest rate possible. A bit of research could save you hundreds of thousands of dollars in the long run. From our research on the best mortgage interest rates in Canada, consider an online lender like motusbank or a credit union like Meridian. Looking at the rates, Meridian has some great fixed and variable rate mortgages, with their 5-year, closed fixed-rate mortgage at 2.59% and their 5-year, closed variable rate mortgage at 2.90%. Likewise, motusbank has some very competitive rates, and you can do the entire application online in under 10 minutes.

If you choose to remain a renter, use the situation to your advantage and set up an automatic saving plan to an investing account with a robo advisor or online brokerage. You may not be building equity with mortgage payments, but you can still build a "wealth empire" with your disposable income. According to the 50/20/30 budgeting rule, aim to put away 20% of your after-tax earnings towards savings and investments.

With low-interest rates and climbing market values, buying a home may well be on your radar. But with obstacles like paying down debt and the mortgage stress test, renting may also make good financial sense for many Canadians, especially since you value financial freedom. Both offer risks and benefits and working through our checklists and guidelines should help you make an informed and realistic decision.

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Rent vs. Buy Debate in the Current Canadian Housing Market

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Last Updated on Once upon a time, buying a home in Canada was simply a milestone in the life of the average Canadian. But times have changed: prices have skyrocketed, and housing markets have exploded, particularly in Vancouver and Toronto, making homeownership difficult and calling the investment potential of real estate into question.

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The website acts as a tool to find which option is better for an individual buying or leasing.

We chose this website as it is easy to find the
personalized better option (buying or leasing) for an individual. This website calculates the monthly payments and total net cost. By comparing these amounts, people can determine which is the better value for them. This site also calculates Rate of return on investments. After adding all the details, we will get a report of our financial stand and according to that we can make our decision regarding buying vs leasing. This is a self-help tools for independent use.

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Should you lease or buy your car? Use this calculator to find out! We calculate your monthly payments and your total net cost. By comparing these amounts, you can determine which is the better value for you. Javascript is required for this calculator.

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In this video says that the buying and leasing of an automobile  as well as the calculations that helps for making the decision in the automobile  therefore, it both has the advantages and disadvantages firstly, the advantage of buying decision is that its an asset for our long term run and the disadvantage of leasing agreement shows that we don't have any ownership for that particular vehicle  in addition, the leasing agreement we need to paying extra cash.

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The buying and leasing overview describes the the buying defined as the higher monthly cost and while the leasing shows the lower monthly payment. In this video says that the buying and leasing concept of a car, the buying concept says that we are going to buy a car and its an asset for our long term run whereas, the leasing says that someone who rent a car for a certain period of time is known as leasing. Leasing is the contract outlining the terms under which one party agrees the contract with other in a certain period of time

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FIN 401 - Leasing vs. Buying - Ryerson University

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1,What did you learn about your topic that surprised you the most?

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1,What did you learn about your topic that surprised you the most?

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After analyzing our topic we learned that the difference between buying and leasing. In that the leasing gives an option for immediately owning an asset without any  financial burden while buying is a concept that allows for putting an ownership for an asset .In this modern globalized world buying and leasing is the two important concepts for our day to day life .

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2,Provide a real-life example of how this topic is relevant or interesting for you.

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2,Provide a real-life example of how this topic is relevant or interesting for you.

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According to me both these topics are really influenced for me ,I believe that buying concept is the better one for our day to day life because its an asset for our long term run. In my personal life, if I am planning to take a car definitely I would like to move  to buying generally its a good idea to buy a without any financial burden. I believe that buying is better for my future.

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3,If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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3,If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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If I could pass the knowledge to my friend or a family member definitely I  would suggest the concept for buying and I would say buying  is much better than leasing. Because at the end they have their own asset. But in the case of leasing though they are paying nothing belongs to them instead they can enjoy that property or what else in a certain period.