If you’re in the market for a new office space, congratulations! Watching your business expand is an exciting and rewarding process, which you don’t want to be tainted with the overwhelming stress that can come with buying or leasing a new workspace. So, here are a few tips to help take away financial concerns and get you a good deal.
Do Your Research and Negotiate on Price
Before signing a lease or investing in commercial property, it is essential that you complete thorough industry research in order to be informed when trying to negotiate on the price. If you know exactly what the average industry and location costs are for that type of building, and can confidently present those figures during price discussions, landlords or sellers will have to come up with some convincing evidence to prove that the price they are charging is acceptable.
Additionally, it is important that you have a good understanding of how commercial property transactions usually happen. For example, sometimes landlord’s might subtly suggest that you are responsible for their legal costs, yet this simply is not standard practice and it is not your responsibility. Many landlords also use commercial property management companies for their own ease, so again you should not be paying for any costs towards this service. Take time to learn about how these transactions should occur to make sure you aren’t overpaying for things that you aren’t responsible for.
Commercial Property Auctions
For those of you wanting to purchase your new office space, a simple way to potentially reduce your costs is to buy through a commercial property auction. When buying through the conventional method, commercial property can be seriously overpriced and you could end up losing money when you eventually go on to sell.
You will be able to view properties and have them surveyed prior to purchase at auction to make sure the property is right for you. Landlord’s commonly are interested in a quick transaction when it comes to selling through an auction, so you won’t be discussing contracts for months on end which is another bonus.
Additionally, auction sales notoriously offer below market price deals, so you could end up getting a fantastic deal. The benefits are endless, really. It is essential, however, to go into the auction with a ceiling figure that you won’t go above under any circumstances. Many people get caught up in the excitement and bid far more than they wanted to pay, which minimises the benefits of buying through an auction in the first place.
Look into Flexible Leases Over Conventional Leases
Whilst conventional leases work well for many businesses who want to rent, it is always worth looking into flexible leases when you are looking for a less rigid agreement. With conventional leases, you are usually tied into a 5 or 10 year contract, you must supply all the furniture and you are also responsible for insurance and maintenance costs in most cases. Additionally, should you need to expand, it is near impossible to get out of a commercial property lease.
Flexible leases, however, are far more suited to particular businesses. Whilst the rent isn’t exactly cheap, you will cut upfront costs significantly as flexible work spaces usually come equipped with all the furniture you will need as well as ready to use shared kitchen and common areas. Additionally, all maintenance costs are included on the most part. These types of leases are usually based upon a monthly rolling contract, making it perfect for business owners who aren’t quite ready to commit to a conventional lease.
Carefully Consider The Location
If you aren’t in a position to pay excessive amounts of money to either lease or buy an office space, then consider looking at locations out of city centres. Whilst the glamour associated with working in the city centre might be appealing, being honest about what you can afford will be far better for your business.
You will pay significantly less for a bigger space outside of the city centre and a time might come in the future when you can move to your dream location. You will also probably have a cheaper commute, there will be free parking which you almost never get in the city centre and there are better motorway links. It’s a win, win, win!
If you know that you want to progress towards a city centre office, leasing might be the better option, as you don’t want to find yourself struggling to sell the property when you are ready to expand.
Final Thoughts
Before jumping into buying or renting a new office space, consider the different ways that you might be able to save money. Ensure you do your research to understand standard industry practices, consider whether a location is really right for you and your business at that time and consider alternative means of purchasing the property, for example through auctions.
By Daisy Moss
Looking for office space in the Cleveland area? Check out our private offices here.