You found the perfect location and now it is time to sign the lease. A poor lease agreement can drain you financially, even if you’re making all of your business goals. Here are 3 tips for negotiating a commercial lease that both you and your commercial landlord can agree on.
#1: Evaluate the length of the lease.
One of the first issues you need to work out is the length of the lease. Commercial leases tend to be longer than home rental terms, averaging out at about 3 years. Evaluate the length of the lease for the right term length that makes sense for you.
#2: Research comparable rent.
Do your homework and know what the going costs are in your area. You can also negotiate fair renewal options including rent increases for the future.
#3: Look for hidden costs.
You need to know if your lease is a ‘gross lease’ where all costs are included, or a ‘net lease’ where there are additional costs such as maintenance and upkeep. Get the details up front and try to work out a cap on yearly increases.
Negotiating a commercial lease can be daunting. Take your time and read your lease carefully to make sure that you understand it completely. When you do this, and you work with the right property management company, you and your landlord can enjoy a profitable relationship that will benefit both parties.