One of the most common mistakes tenants make when leasing office space is paying too much rent. Leasing a new office space is a milestone for many, but before you begin looking for available office spaces you must first take into consideration your budget.
Determining your budget will save time and help narrow down your options while you’re on the hunt for your new location so that you are not looking at properties that are outside of your comfortable payment range.
There is a simple algorithm used when determining your rent:
(Square Feet * Rate) / Months Leased = Monthly Rent.
Let’s assume you’re going to rent a 2,000sq foot office space as the home for the first year of your new startup, the owners are asking for $14/sq. foot. Therefore (2,000 * $14) / 12 months = $2,333/ month.
There are a few ways you may be able to negotiate your lease terms that rely on a few different factors:
- Keep in mind that the longer the lease term, the more bargaining power you have and you may be able to negotiate a price-cut on your lease payment or other fees associated with your office space.
- Do you need to have a nice view? More often than not the choice between interior or exterior office spaces could result in anywhere between 10%-15% in price differences.
- The rules of supply and demand also apply to commercial leasing, so if there are a lot of available office spaces for lease in your area there is also a higher chance you will be able to negotiate a lower monthly payment due to building owners wanting to fill up their properties.
If the office space you are looking at is not all-inclusive then you must also be prepared for additional charges in conjunction to your base monthly rent. These can quickly add up. Utilities such as electricity and internet access, cleaning services, general maintenance, or others amenities may not be included so you must be sure that you thoroughly understand the leasing terms to factor these possible charges into you budget.
Once you have located a few options then it’s time to narrow down your search by considering their locations. It is best to be situated in close proximity to your employees whenever possible.Proximity to major highways or public transportation routes are also a plus because they provide convenient access for your patrons.
Location near your business specific needs as well as compatible businesses such as a restaurant can be an asset that you may want to consider when deciding to lease an available office space.
Leasing office space can be a complicated process, but when you settle on a budget and take into consideration the desired amenities you would like then the task becomes a bit less daunting because you’ve created a blueprint for yourself to work off of.