Leasing Your Church Property: A Smart Stewardship Strategy in 2025

Author: Aaron Mills and Heather Gapik
November 15, 2025

Leasing all or part of your church facilities is no longer a last-resort fundraising idea—it has become one of the most strategic tools congregations use to fund ministry, avoid selling sacred space, and reach their community in new ways.

Here are the most practical insights we’ve learned after structuring hundreds of church leases in Southern California.

1. Know the 4 Main Leasing Models (and Which One Fits Your Vision)

A. Full-Facility Lease (You Move, They Occupy)
Another congregation or school rents your entire campus while you relocate. Common when a church is merging or moving to a new site. Typical term: 5–20 years. Rent often covers your new mortgage payment.

B. Shared-Use / Co-Tenancy
You stay, they join. Think Sunday-only church plant, mid-week private school, or evening recovery ministry. This is the fastest-growing model in 2025.

C. Weekday Commercial Lease
Lease classrooms, gym, or parking lot Monday–Friday to a daycare, tutoring center, co-working space, or medical practice. Churches routinely generate $4,000–$25,000+ per month this way.

D. Ground Lease or Build-to-Suit
A developer leases your excess land (or air rights) for 49–99 years and builds apartments, senior housing, or retail while you keep the sanctuary and keep the monthly rent.

2. The Money Can Be Life-Changing (Real Numbers)

12 classrooms leased to a preschool @ $1,200–$2,200 each/month → $15,000–$26,000/month
Gym + kitchen leased to an after-school program → $8,000–$12,000/month
Parking lot leased to nearby hospital for staff overflow → $3,000–$10,000/month
Entire 30,000 sq ft campus leased to a growing church plant → $12,000–$30,000/month

One mid-size church we work with now receives $28,000/month in lease income—enough to be 100% debt-free and hire two new pastors.

3. Protect Your Ministry: The 5 Non-Negotiable Lease Clauses

Right of Reversion – If the tenant ever stops using the space for its stated purpose, the building automatically reverts to the church.
Subordination & Non-Disturbance Agreement – Protects you if the tenant tries to borrow against your building.
Use Restrictions – No alcohol, gambling, or activities that conflict with your doctrine.
Maintenance Matrix – Spell out exactly who changes HVAC filters, replaces roof, etc. (Some churches require triple-net leases so the tenant pays everything.)
Insurance & Indemnification – Tenant carries $2–5M liability and names your church as additional insured.

Never use a standard office or retail lease template. Church leases are unique.

4. The Hidden Tax Surprise Nobody Talks About

If you lease your building to an unrelated for-profit entity, you can trigger Unrelated Business Income Tax (UBIT) or even jeopardize your property-tax exemption. Work with a church-savvy CPA or attorney before you sign anything.

5. Start Small and Test the Waters

Don’t leap into a 10-year full-building lease. Begin with:

A 3-year church group lease with optional lease extensions
Some classrooms to a homeschool co-op
Fellowship hall for a food-truck ministry on Wednesdays
Parking lot for weekend events

You’ll discover what works, train your staff on logistics, and generate immediate cash flow while you decide on bigger moves.

6. The Biggest Mistakes Churches Make When Leasing

Signing a personal guarantee (never do this as a church)
Allowing the tenant to record the lease at the courthouse (makes future sale almost impossible)
Forgetting to require annual rent increases (3–4% or CPI)
Not budgeting for your own professional/legal fees ($3,000–$8,000 is normal and worth every penny)

Final Thought: Leasing Can Be Kingdom Collaboration

The most beautiful leases we’ve seen aren’t just about rent checks—they’re partnerships. One church leases its facility Sunday afternoons to a Spanish-speaking congregation and Wednesday nights to an Indian Christian fellowship. Three churches, one building, zero debt, and hundreds of new souls reached.

Leasing isn’t “renting out God’s house.” Done prayerfully and wisely, it’s multiplying the impact of the square footage He already entrusted to you.

If you’ve ever wondered, “Could our building do more for the Kingdom—and for our budget?” let’s talk. We specialize in turning underused sanctuaries into sustainable ministry engines. You don’t have to sell the building God gave you to fund the vision He’s given you now.

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