5 Things to Remember Before Taking Commercial Property on Lease
Finding a commercial property that matches your requirements is a difficult task. Aspects like zonal restrictions, rentals, etc., are a few things that you need to take care of. Adding to this, once you decide on the commercial property keeping the aspects in mind, the next thing that you need to address is whether you want to buy the property or go for properties on lease. Here, the decision involves a detailed study of tax implications, rentals, expected inflows from businesses, etc. For the same, many business owners or those planning for a commercial property may seek help from advisors, brokers, and accountants; however, before you go to them, there are still factors that need to be taken care of. Understandably, with so many real estate developers offering commercial properties on a lease, choosing the best one can become a little challenging. Therefore, we have come up with the 5 topmost important things that you need to remember before entering a rent agreement on commercial property.
1. Do Your Research, Take Your Time
One of the most important things that many people skip is researching well about the commercial property for lease. As mentioned above, there are plenty of real estate developers that are offering commercial sites on lease. To make sure that you choose the right one, you must check out as many properties as you can. Book appointments with the developer and visit the property sites; check out all the aspects like the flooring and plug points (yes, they matter), ventilation, and so on during your inspection. Adding to this, you must also study the local real estate market properly to have a rough idea of what commercial rental rates look like in the area.
Coming to the second part of this tip for leasing commercial property, don’t be in a rush to sign the deal. Impromptu decisions may work at times but for real estate, it never does. Take your time to think and then say yes to the real estate developer whose property you are taking on lease. That being said, don’t take too much time either as the risk of losing the offer may crop up.
2. Know the Location
This tip is extremely important for your research and vice-versa. Before entering into the rent agreement for commercial property, you must thoroughly know about the location. For each property that you check, you must also explore the location. Study the neighbourhood, submarkets, customer behaviour as well as the infrastructure and hygiene of the area. For businesses with walk-in facilities, you must give special attention to the parking and security of the area; for manufacturing or factory unit businesses, transportation facilities, how much time is taken for the transport, and good connectivity with suppliers need your attention. To be successful in business, you must take these factors into account.
3. Know your terms
Another tip for leasing a commercial property is to know the lease terms. Technically, the terms of the lease vary from 5 and 5 to 10 and 10 and so on, depending on the laws of the country to country or developer to developer. Some property developers offer yearly contract renewal, some offers contract of 3 years, and so on. You must know about the lease terms of the properties you check and see which term is best suitable for you and your business. Try to negotiate a little if the need arises.
4. Read and Understand the Agreement
Honestly, most business owners who are entering a lease for commercial property tend to just glance through the agreement instead of reading it in depth. And the ones who do, feel shy to ask their queries to the property developer. In such cases, they end up signing an agreement that may be in favour of the developer entirely. However, never do that; always read the lease agreements from start to finish, try to understand the terms and conditions given, and ask your queries. For commercial lettings, it is quintessential to have your doubts cleared. Read all the clauses and if needed, suggest making amendments in the ones that you are not satisfied with.
5. Take Legal Advice
Lastly, before you sign anything, talk to your lawyer. If you don’t have a lawyer, then hire one. Once you have read the agreement, ask your lawyer to read to it. He/she will be able to understand and explain the clauses better than anyone. They will give you the right advice on a commercial property lease. This way, not only will you be able to make an informed decision but also subtract, alter, or add clauses that suit your requirements the best. Just like any other legal contract, get your property lease vetted and approved by an attorney without a miss.
Option for a commercial property on lease to start your business requires a lot of patience and can be overwhelming at times. But there is nothing to worry about; keep these 5 things in mind while you are taking a commercial property on lease, and you will be good to go.