Do you have a growing business? If so, are you thinking of leasing or buying a larger office space? If you have larger funds to invest in premises, consider buying, else leasing will work best for you.
Here are a few strategies for dealing with landlords, to make the most of your lease deal.
Look beyond permitted uses: Generally, a lease agreement will specify the uses that the space leased out to you, can be put to. Ensure that your agreement allows you to conduct the entire range of present as well as planned activities. If your business is on a growth path, it is a good idea to take a larger space than you need at the moment, so that you can accommodate your future needs as well. In the interim, you could sub-lease the extra space to another business, provided your agreement allows you to.
Opt for a short term lease: Even though your business has a long-term goal, sign a short term lease agreement, if possible. You will find many landlords offering discounted rates for long-term lease contracts, but be cautious while dealing with such matters. With a shorter lease, you have greater flexibility to deal with any changed requirements in the future.
Take into account rent increases: Every long term lease agreement will specify a periodic increase in rent. In case your agreement is for a short term, insist that your landlord gives you adequate advance notice in writing about the intention to increase rent after the current tenure lapses. Usually, rent increases fall within an acceptable range – understand this beforehand.
Beware of maintenance and other charges: Find out the extra charges that you may need to bear - like HVAC (Heating, Ventilation and Air-Conditioning) and any other building maintenance overheads. Check if there is a cap to all these charges and try to get an idea of the periodicity of increase.
Ask for allowing alterations to the space: Usually, landlords will not allow you to make any alterations to the space they have leased out. However, you can request for a clause that allows you to make any alterations or improvement with the landlord’s consent.
Check the renewal option: If you plan to renew the lease, try and negotiate easier terms to your advantage. After all, not having to find a new tenant will save the landlord time, effort and brokerage fee. In the bargain, the landlord might agree to a rent that is a bit lower than the market price. From your perspective, you need to know when to begin the lease renewal process, and what terms apply in the interim.
Consider all the above points before signing up any lease agreement for your office space. Above all, have your real estate broker or lawyer go through the terms of the lease agreement in advance. Experts can assist you in leasing office space and ensuring that you find the right space at the best deal possible. You could also learn a lot from books like “Leasing Office Space You Can Afford: Everything Companies Need to Know-From Finding Great Space, and Negotiating the Lease,
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