Premises Pressure: 6 Mistakes First-Time Commercial Renters Make
Picture: Yong Chuan Tan / Unsplash
Being a first-time commercial renter can be exciting. You’re embarking on a new business adventure and have the opportunity to find the perfect commercial premises to set up in. Yet, renting a commercial building for the first time can also be fraught with challenges. There’s potential for you to make some of the following mistakes:
Mistake #1: Not Using a Commercial Rental Agency
Whether you’re looking for commercial property for sale in South Melbourne or commercial property to rent anywhere else, you can shop around and talk directly to property owners. However, there’s great value in connecting with commercial rental agencies.
They can save you time by finding properties on your behalf. They usually also have details of properties that are yet to be listed, and they have a great deal of market knowledge that can be invaluable.
Once you’re set on a property, commercial rental agencies will use their expert negotiation skills for your benefit and offer customized solutions. Unless you’re supremely confident in your negotiation skills, this can be a huge asset.
Failure to use a commercial rental agency may mean you have limited access to listings, lack market knowledge, and potentially overlook critical details. In other words, you’re drastically limiting your possibilities.
Mistake #2: Not Researching Preferred Properties
When you find a commercial property that ticks all the right boxes for size, location, and other factors, it’s tempting to quickly sign on the dotted line. However, as perfect as a property can seem, it’s still advisable to perform research.
Find out about the property’s history, zoning regulations, and the potential for future development. You might also learn about planned projects that might affect your business. Failure to research may throw you up against some pretty problematic hurdles that impact your business later on.
Mistake #3: Not Understanding All Costs
The cost of your lease is just one of many costs you face as a commercial renter. One of the most common mistakes tenants make is not factoring other costs into their budget before renting a commercial space.
Alongside rent, averaging around $21.85 per square foot, you may also need to pay taxes, insurance, maintenance fees, and utilities, just to name a few. Your chosen commercial agency can inform you of the costs that landlords may charge on top of rent, such as common area maintenance (CAM).
Mistake #4: Not Reading and Understanding Lease Terms
Signing a rental agreement for a commercial property typically involves reading multi-page documents about your rights and requirements. Once you sign, you’re agreeing to abide by those terms.
A common mistake is failing to read and understand those terms, which may not have a favorable impact. Before signing a lease agreement, always consult a lease expert, such as a real estate attorney.
Mistake #5: Not Thinking About the Future
Some commercial buildings can suit your needs perfectly now, but that doesn’t mean they will over the coming years. If you anticipate growth or think you’ll need to downsize, keep this information front of mind when searching for new premises.
Failure to think about your business in the future may mean you’re locked into a rental agreement with an office, retail space, or 3PL warehouse that isn’t fit for your needs.
Mistake #6: Not Performing An Inspection
Many commercial properties are beautifully presented for future tenants. However, that’s not to say all are. Don’t underestimate the value of a walkthrough and inspection before taking over. You can inspect the space, document existing damage, and verify that all systems, such as plumbing and HVAC, work as they should.
All business owners are capable of making mistakes when renting a commercial space. Still, that doesn’t mean you have to be one of the business owners who does. Remember these common mistakes, and you’ll be well-positioned to enjoy a seamless and stress-free commercial renting experience.