After dedicating a lot of time, financial resources, and labor to your small business, it is starting to grow. The growth means that it is time to start researching commercial properties that you can lease for your business. With more space, you can continue to grow and expand the products or services that you offer. Before signing your commercial lease, it is important to understand some of the ins and outs of renting a commercial property.
1. That Lease is Practically Unbreakable
Commercial leases are known for being practically impossible to break. Even if your small business fails, you are expected to pay for rent for the remainder of your lease. Some states require landlords to attempt to find another tenant, but there is no guarantee this will happen. Expect to pay the full amount of the rent for the duration of the lease.
Since it is so difficult to break the lease, it is important to make sure that the property suits the needs of your business. Make sure the space is usable space; 1200 square feet of space is useless if you can't set it up in a way that is conducive to your business.
Look over your financial records to ensure that the amount of the monthly rent is affordable based on your cash flow and profit.
2. You Need to Research Zoning Regulations and Rules
Even if a property is designed for commercial use, this does not mean it is an appropriate fit for every type of commercial activities. Research the rules that pertain to the space. Some may prohibit what kind of activities may take place on the premises.
Other laws may specify that business owners obtain permits for certain activities. Obtaining permits can be a time consuming process that adds to your bottom line. Do your research so you know what to expect.
3. Lease Terms are Flexible
One benefit of renting a commercial space is that you can negotiate the terms of the lease with the landlord. You may be able to alter the term of the lease so that you can make sure the space is a good fit without committing to a lengthy lease.
Other terms to negotiate include the security deposit, monthly rent, use of shared spaces, rent increases, tenant improvements, and the right to sublease.
Acquiring the right to sublease the space can be beneficial if the space doesn't work for your business or if you decide to end your business activities. You have the ability to rent the space to another tenant so you do not have to break your lease.
Renting a commercial space is an important step for any business. Make sure it is the right move for your organization by understanding some of the basics before you sign on that dotted line. For more information, contact local professionals like Hartman Income REIT.