10 Things to Know Before Renting a Commercial Property

Commercial property rental for whatever reason you are setting up a new office a retail store or making your business more operational requires a major step. This is the type of decision that will determine the growth and visibility of your brand. The process may seem much alike as when you lease out a home but it is quite different in terms of rules and regulations. If you have any experience in the residential rental solutions, you will quickly realize that what you see on the commercial side is a bit different.

Before you make that dotted line squiggle, you’ve got to know what you’re committing to. To you, this will be the least, understanding the lease terms, property condition, and legal obligations will in no way come as a surprise to you. If you are looking to jump into the vacation rental services or to establish a long term space for corporate rental services, then choosing the right from the beginning is important. I will take you through ten things you should keep in mind before you rent a commercial property.

Here are the 10 Things to Know before Renting a Commercial Property

1. Understand Your Business Needs

Before you begin hunting property, be crystal clear on your business requirements. What is your need for a storefront, an office space or a warehouse? Think about the budget, the size and the location of the restaurant, as well as the number of people who normally frequent that area. If you are a small consultancy that meets clients online, don’t rent a large showroom. If you want to narrow your search to what you need and not envisage spending more than you have to, you need to tailor your search.

2. Research the Location

Location can render or break your business. You should look into the neighborhood’s accessibility, competition, safety, and customer demographics. Can the people in your team and on your customer side reach it easily? Are there complementary businesses nearby? Maybe a bad choice of area on something you might even consider a great property.

3. Understand the Lease Terms

Commercial lease agreements are very elaborate and difficult to make sense of. Find out the difference between gross, net and modified leases. Understand how much of a rent increase is included in your payment, and the figure’s calculation. This way you understand the terms from the start and will be surprised later on, and you will be able to plan your budget for the whole lease period better.

4. Evaluate Zoning and Permits

Every sort of business cannot be legally accommodated in every space. Check that you are using the property according to its zoning. For instance, if you are opening a café, the space has to be cleared for food and beverage operations. You also may require special permits or licenses. Before setting down, always check these legalities in advance in order to stop setbacks.

5. Inspect the Property Thoroughly

It is important to inspect a property carefully before actually signing anything. Inspect for such problems as plumbing, electrical wiring, structural integrity and internet access. Forget the aesthetics, a minor flaw could be very costly in the long run. If you think you need in a professional, ask them to help or you can request repairs or negotiations if something doesn’t tick your boxes.

6. Consider Future Growth

Think about your long-term plans. Will you still to fit here in two to three years? Select a property that has some flexibility or expansion. Otherwise, you might be putting yourself into the situation in which you’ll have to move up soon, which can be very expensive and may be disruptive to your business operations.

7. Understand the Total Cost

The cost is more than simply renting. Don’t forget to include maintenance, utilities, taxes, insurance and even common area charges. Some leases also demand deposits or renovation costs upfront. You should land on the clarity of what you are actually committed to financially so you can plan and budget accordingly.

8. Read the Fine Print

Always need to go through the lease agreement thoroughly and we mean thoroughly. Also, look for lease duration, renewal clauses, exit terms, rent escalation and subletting options amongst other details. If you don’t understand some point, get a legal advice. Less than a little more caution now will save you the headaches later.

9. Check the Landlord’s Reputation

Most of the time, your landlord will be the one who is responsible for your rental experience. And a friendly and fair landlord, who is responsive enough, can indeed make your life much easier, particularly when you need to get maintenance work done or negotiate your lease. Get reviews, other tenant’s opinion, even request a reference. Knowing who you are dealing with for the next few years is worth it.

10. Negotiate Before You Sign

Rent and deposit terms, improvement allowances, move in dates, almost everything in a commercial lease is negotiable. Don’t take the first offer without discussing. A good lease will save you thousands over the years and better allow you to control the building and your operations.

Conclusion

Renting a commercial property is great but it should be something planned well. You will succeed if you focus on your business needs, know what lease terms mean and what the long term costs will be. The problem is not just about finding a space but rather a space that works for you.

With the right commercial property, whether you’re getting into residential rental solutions in new ways, expanding into new categories of business of you existing business in vacation rental services or corporate rental services, the right commercial property can take your business to the next level. Be sure to not rush and to ask the appropriate questions with every square foot.