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Whether you need an extra warehouse, piece of land, office space, or any other type of commercial property, finding the right one can feel like an uphill struggle. Things may even be worse if you’re not sure what you’re looking for.
As with many things in life, a small wrong decision made in the process of renting a commercial property can be disastrous. Conversely, approaching the process insightfully, with all the do’s and don’ts in mind, can make the move extremely rewarding.
The good news is that this article contains the most important facts you need to know before renting any property for your business to make the task easier for you.
Let’s begin!
The contents of the lease matter
When choosing a property, one of the most important considerations you need to make is what is included in the rental rate. Commercial leases usually have different formats, and each one depends on the way the property’s operating costs are passed on to a new tenant. You can agree to pay a fixed amount of money each month and leave the landlord to cover the building-related expenses. This type of lease is referred to as the gross lease.
There’s a different structure that involves paying the base rent and expenses, which include things like insurance, maintenance fees, and utilities. It’s known as the net lease.
You may also come across a lease that combines the net and gross lease. This means that as a tenant, you’ll have to be responsible for certain increases in the operating expenses alongside the gross lease.
Before signing a lease, make sure you understand the lease structure and what you’ll be paying as a tenant. You can ask the landlord for cost projections to assist you to plan if you’re expected to pay for certain expenses.
Creating the right impression is critical
Before renting a property, always remember that your business premises have to correspond to your business operations. For instance, if you’re in the clothing and accessories industry, it would be prudent to look for an ambiance or look that would suit your audience. That means that getting an ultra-modern business block to sell vintage clothes or accessories would not be a great idea. A shabby, but chic and open space would be more ideal. Conversely, a clean, tasteful, and modern establishment would be more appropriate for people looking for unique, modern, and elegant clothes and accessories, and non-invasive beauty treatments.
Ideally, space should frame the context in which you operate and the kind of people you serve.
It may be more expensive in the long term
While a lease is often great when it comes to cash flow, especially in the early years, it may be more expensive compared to a purchase over the long haul. Most people know that a lease often comes with significantly fewer up-front outlays compared to a purchase. Actually, your main expense with a lease may be your security deposit and your first rent payment. However, the fact purchasing a property comes with massive tax savings and the property owner will always try to generate a profit from the property means that buying the property would be cheaper than leasing it in the long term.
Consider the nature of your products or services
Finding a commercial property for your business can be easy or very difficult depending on the nature of your business. For instance, many business owners who are legally involved in the business of cannabis often face numerous difficulties getting property owners to lease out spaces to them. However, this process doesn’t have to be difficult.
If you look for a property with the nature of your business in mind, things can become very easy. For instance, as a cannabis business owner, you can start the search process by looking for Cannabis real estate companies whose main focus is cannabis businesses. Today, there are countless “420 properties” that are established specifically for cannabis professionals. Starting with these ones can make the rental property-hunt process easier for any business owner in the cannabis industry.
If you’re thinking about renting a commercial property for your business, you need to keep the tips above in mind to increase your chances of making the right decision, which includes finding the right property.