As a business owner, a commercial lease is one of the most important aspects of your company. With the right terms and conditions in place, you'll feel good about your place of business as well as how much money it costs you each month.
During your search for the perfect property, it's critical to remember that you have the right to negotiate a commercial lease. The landlord doesn't have to negotiate off of their originally proposed terms and conditions, but it never hurts to ask.
Here are some tips to follow when the time comes to negotiate a commercial lease:
- Start with the monthly rent: It's where you'll eventually turn most of your attention, so you might as well focus on it up front. Once you know how much you're asked to pay each month, compare it to other rents in the area. This will give you a clear idea of whether it's in line with the market, or you're being asked to pay too much.
- Consider the term of the lease: Some companies are interested in a short-term lease, while others realize that something longer is in their best interest. You should know what you're looking for, and then compare it to what the landlord is offering. While most are unwilling to negotiate from longer to short, many are willing to negotiate in the other direction. Signing a longer lease is often one of the best ways to save on rent.
- Review the lease for hidden expenses: There's nothing worse than a hidden cost popping up when you least expect it. Before you sign, it's imperative to know exactly how much money you'll pay each month, as well as any expenses you could be responsible for in the future.
- Review the termination clause: There may be times when you can terminate your lease without additional penalties. If so, you want to know about these. And if not, you want to know what you're on the hook for should you have to terminate your lease early.
You can negotiate on all the terms and conditions above, as well as any others that may be part of your lease. When you successfully do so, you end up with a lease that works for you and your company's finances, both now and in the future.