7 Questions to Ask Before Renting an Office Space
Starting and growing a business requires a substantial amount of time and effort, so finding suitable accommodation is an important factor for the success of business operations. Because this is a major commitment, you'll want to make sure you make the right choice and to do that you'll need to ask the right questions when you visit potential sites. Here's an overview of the top questions to ask yourself when looking at office rentals.
How much capital do you have available?
Office rentals come with a deposit requirement, amounting to anything from 1 to 6 months' rent depending on the length of your contract and the office location. Make sure you have enough capital to cover this expense upfront. Otherwise, you may want to consider alternative office arrangements, such as private space in shared office buildings, or coworking spaces. You'll also want to account for potential rent increases in the future by looking at historical trends in your area.
How soon do you need to move in?
Traditional office space usually comes unfurnished and, as the tenant, you'll be responsible for setting up utilities like internet access, phone lines, etc. This process takes a while and can push back your move-in date by weeks. If you need something ready to move in, serviced offices may be a good solution.
How easy is it to access the office?
In terms of access, you'll want to consider if there's parking for staff and visitors and if the office is in a congestion charge area. Offices located near public transportation routes may carry a premium so, if this is important, you'll need to budget accordingly. You may also want to double check if there are any access restrictions outside regular work hours.
Is there a rent guarantee?
It's common practice to ask for a rent guarantee when the contract involves small businesses or first-time business owners, as landlords want to have the confidence that financial obligations will be met. In some cases, your financial institution will be able to issue this guarantee.
Are there additional expenses involved?
Unless your rental contract is all-inclusive, you'll need to factor in additional expenses, such as business rates. These are location-dependant but can be estimated through the use of calculators such as the one found here.
You may also be responsible for maintenance expenses, which are estimated to cost an average of approximately $2.15 per square foot (&pounf;17.27 per square meter). Other additional expenses may include utilities, service charges, cleaning, security, and management fees.
What's the contract length?
It's not always possible to predict what your business needs will be in the future. Unless you're a large and well-established company, short or medium-term contracts may be the way to go. These types of contracts offer the flexibility to expand or downsize as needed, allowing you to remain agile. Alternatively, you may want to consider serviced offices, some of which operate on monthly contracts.
Is there a break clause?
Irrespective of contract length, you'll want to know where you stand if unforeseen circumstances occur and you need to end the contract before the agreed date. It's also important to be aware of such clauses with respect to your landlord, you don't want to be blindsided by being asked to vacate the office on short notice. Finally, it's important to find out if your break clause is effective from the date contract is signed, or if it instead comes into effect after an unknown period of time.
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