According to Steven Taylor of Taylor Equities, if you are thinking about renting a commercial property, there are many things to consider before you sign a lease. The commercial real estate landscape comes with many complications and isn’t as straightforward as renting a residential space. To find the right property, you will need to understand the factors that will affect your lease term.
Here are a few things to consider when renting commercial properties:
the right location
Before deciding to rent a commercial property, it is important to research the neighborhood and understand the market. Is this location a prime area for your business? Pay close attention to street traffic, noise levels, economy changes, and customer behavior in nearby businesses. Does the area have ample parking? Will employees and customers feel safe and secure? Is the building accessible to your manufacturers and suppliers? Taking the time to ask the right questions can save you time and energy in the long run.
on rent and tenure
Once you have chosen a property, you will need to agree on rent and tenure. Many renters don’t realize that a lease is negotiable. Don’t be shy when researching properties - to ensure you get the best deal you will need to discuss and negotiate the lease terms with the landlord.
Locking in a deal that will decrease monthly expenses can be a game-changer. If a property you are interested in is out of your predetermined budget, first see if the landlord will budge on the rental price. If not, look elsewhere. In most cases, it won’t be worth splurging and taking the risk. The same rule applies to tenure. If you are looking for a short-term lease with renewal options, but a building is requiring a long-term lease, it is essential to consider how your business will be affected.
the type of lease you are entering
There are a few different types of commercial leases. Make sure you understand what type of property you are renting and how the payments will be executed.
This is the type of lease used most commonly for retail spaces. With a percentage lease, the tenant pays the landlord a base rent as well as a sales percentage.
In a net lease, the tenant must pay the landlord expenses incurred while renting the property, such as maintenance expenses, in addition to their rent.
In a gross lease, all fees are included in the per square feet price.
examine the agreement
Many people sign a lease without thoroughly reading the fine print. Steven Taylor of Taylor Equities believes, this can be a grave mistake. Spend an ample amount of time reading through your lease agreement. If there is anything you don’t understand, consult a real estate professional or lawyer. Otherwise you may end up signing an agreement that greatly favors the landlord. Often, renters don’t realize that their lease is negotiable. Look through the agreement and discuss each clause. A lease agreement should clarify all of the tenant’s rights and obligations.
Do your research, negotiate a deal, and always have an exit plan. The process of renting a commercial property can feel overwhelming, but if you take the time to consider the factors that will affect your business, you could save yourself from a bad business deal and improve your chances of long-term success.