Whether you’re starting your business, downsizing, or expanding, it’s always a good idea to calculate the true cost of commercial space. Companies often forget a lot of the smaller yet significant expenses that come with renting property. So, before you sign a lease for offices or consider buying property, here are a few tips to help you make smart, informed choices.
The first thing you should do is create a budget for expenses. How much space do you need and how much can you afford to pay per month on rent alone? That way, when you’re looking at available space, you can narrow down your search to places that fit your needs and budget. This figure will also help you when you start to add up all the additional expenses. Should the figure exceed your budget, it’s time to look at other commercial space.
Landlords and letting agencies determine the value of property in a number of different ways. Location, size, and age of the property are some of those determining factors. With commercial property, however, it is rented at a price-per-square-foot. Often more than one business is able to occupy space. Be aware that just because you’re paying for, say, 1,000 square feet means you are occupying 1,000 square feet. Some landlords calculate the area from part of the exterior walls. You’ll have to take this into account when you’re comparing properties quoting similar workspace areas.
If you’re in a building with multiple offices, make sure you know how much you’ll be paying for other areas of the property. Often landlords and letting agencies will charge businesses for common areas inside and part of the outdoor property, too. Common areas include lobbies, bathrooms, and parking garages. Outdoor areas include parking lots and any green space. Generally, this price should be rolled into the cost of the price-per-square-foot but it might be an additional cost added at the end.
If you are looking into retail commercial space, landlords and letting agencies might charge you other fees on top of rent as well. Many shopping mall properties will expect a portion of your profits. You might also have to pay other extras like a maintenance fee, insurance, or property taxes. Make sure that you ask about whether the price you’re being offered includes all of these costs. In some cases, you will have to arrange for insurance and taxes yourself, so do your research and make sure that every cost is accounted for.
Once you’ve determined that the cost of monthly rent fits your budget, it’s time to consider the value of what you’re getting. The properties you’ve narrowed down will inevitably be different. Some will be in beautifully designed spaces. Others will be energy efficient and save you money on energy costs. Here, you will also be choosing to invest in the most appropriate size of the commercial space. Companies might also want to consider the location, often regarded as the most valuable aspect of a property. It will depend on what you need and what works best for your needs and budget.