Tuesday, February 4, 2014

Hints for renting commercial space

Commercial businesses are bound to deal with renting a commercial space, whether for office or retail use. For these types of businesses, location is key to making the business successful. 

Consider the lease period you are willing to commit to and discuss this with the landlord.

An enviable business address creates a great impression on clients, whereas a strategically located retail space can lure in your target market. While the advantages of having a commercial space are numerous, it is also a large overhead expense incurred regularly, whether your business is earning or not. 

Negotiate a favorable commercial lease to benefit your company in the long term. 

Lease agreement

The most basic points you need to negotiate are the rent and terms of your lease. Consider the lease period you are willing to commit to and discuss this with the landlord. Be sure to cover rent increases, as some landlords require an annual rent increase. Work out an agreement with a fixed rent or specific rate increases over your lease term with a renewal option, so you won’t be surprised with unexpected charges. Also, it is common practice in leasing properties to ask for a two-month rent deposit and two-month rent advance. Discuss this with the landlord as well. 

Hidden costs

Aside from the rent, there will be some hidden costs such as maintenance fees and utility bills as well. Find out how these costs are measured, particularly if you’re sharing a floor or building with other tenants. Are these fees and bills individually metered or divided among the tenants according to the rented area?

Improvements

Most businesses, particularly retail stores, need to renovate a rental to suit their business needs. Find out the extent of allowable improvements and whether you are required to restore the space to its original condition when you move out. Also, renovations take valuable time and overhead costs from your business. Try to negotiate a few weeks or a month’s time for renovating the space without incurring rent. 

Subleasing

Discuss subleasing rights with the landlord. If your business is not growing at the rate you expected it to, having subleasing rights can help you cover part of your business costs. On the other hand, your business may also be growing at a much faster pace than you expected, and a long-term lease may prevent you from moving to a bigger place. Subleasing can also help you cover costs without breaking your lease agreement.


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