It is common for business owners and enterprises to lease real estate for commercial purposes. The commercial real estate market is not as standardized as that of the residential market. Hence, if you are a novice in leasing property for business, this blog is for you. Read on.
Leasing commercial real estate property is ten folds more complicated than renting a house or an apartment. The stakes are immensely high and in several cases, people, both tenants and landlords, are looking for guidance to carry out this process. It gets a lot more tedious to locate vacant spaces for commercial purposes due to the lack of right contacts. In this article, we will explain how you can lease your commercial real estate property in a simplified manner.
Before we dive into the topic, we recommend you check the commercial properties listed here. We are curating a number of good-quality properties in various budgets and locations. Apart from helping you find the most suitable offices and retail spaces, we also assist in the completion of all formalities right until the end of the deal.
What are the benefits of leasing commercial properties?
As a business owner, you are often at a crossroad where you have to choose between leasing and buying a commercial property. Most consultants recommend that you start out by leasing an office and then consider purchasing it after the business has taken off and is making considerable profits. Here are some reasons why leasing your office or retail space works:
1. You have lesser number of responsibilities. The owner of the property will take charge of security, maintenance, and other management duties.
2. You have the flexibility to switch base. It places you in the driver’s seat when your lease is done. You can either continue with the same space or relocate to a better or bigger place based on the progress of your business.
3. You do not have a mortgage to pay off. This advantage can really benefit business owners who can put their money to better use.
4. You do not have to worry about down payments. In the case of property purchase, you have to hand over a percentage of the entire property value as down payment and the rest is mortgaged whereas when the property is leased, you are required to pay only one or two months worth of the lease amount before moving in. This is again a huge benefit for small business owners who are strapped for cash.
5. Taxes are easier. You do not have as much paperwork when it comes to filing your taxes as opposed to when you buy a commercial rental property.
Where can you get started?
It can be daunting if you are new to this whole game. The first question you should ask yourself is whether you should hire a broker. There are so many nuances that are involved while leasing property that a broker can effortlessly handle. If you do wish to get one, you have to find a broker that represents tenants i.e. a tenant’s broker and not a leasing agent who represents landlords. Brokers take up the responsibility of showing you properties. As a commission, they take a percentage of the lease amount. To hire a broker, you can make use of referrals from people who have had prior experience with them. Finalize one who knows how to dig out information about vacant commercial properties and who also has significant knowledge of the types of commercial leases (percentage lease, net lease and gross lease), lease terms and agreements in order to point out problematic clauses. In addition, their work should also be worth their commission.
Secondly, you can skip the broker and browse for property options in online portals. In most cases, as a tenant, you would not have to bear the expenses of brokerage. Rent4Free also offers personal assistance in addition to a catalogue of extensive rental properties information. Click here to know more.
The Process of Leasing Commercial Property
To sum it up in a nutshell, this process has certain steps that need to be mandatorily followed. They are stated below:
Determine space requirements: Before you set off looking for spaces, understand what your business needs are in terms of size, location, amenities etc.
Look at the available options in the market: Check for commercial properties either through an online real estate site, broker or referrals.
Select qualified properties: Shortlist the ones that match your requirements.
Physical tour: Take a look at the property and review it meticulously. This is a very crucial step as this is where you make the decision. Take your time here. If everything looks good, proceed to the next step.
Submit a proposal for lease: In this step, you could encounter several complications. There is a lot of back and forth between the landlord and tenant in terms of the offer, functional histories etc.
Negotiation: Finalize all aspects of the lease. If necessary, get help from a legal body to avoid any future disputes.
Completion of agreement formalities: In the final step, the lease is official. Here, you understand the various terms and benefits.
Leasing commercial property for your business is a great idea but it also comes with a lot of difficulties. Hence, while you are going through the entire process, never cease to take advice and suggestions from experts and consultants. Although it is not permanent, it is an investment for your business and it can make all the difference. If you are interested in leasing a commercial property, we would love to help. Give us a call at 044-4600-6400 or drop in an email at firstname.lastname@example.org and we will get back to you, pronto!