5 Hidden Office Space Costs Business Owners Should Consider
When a small business owner is looking for office space for their business, they often assume that the only amount to pay is the cost of the lease. But one must be very careful when renting office space, as there are several hidden costs associated with renting office space that business owners will not be aware of.
It may be because they are looking for office space on their own or because they are in the hands of an inexperienced commercial real estate agent who has not explained the lease terms and additional costs in detail. This would land them in serious trouble later on, which may make them think about vacating the office space. In some cases, they will not be in a position to vacate the space since they will have signed the long-term contract.
To avoid these conflicts later, business owners need to be aware of the hidden costs associated with renting.
So what are those hidden office space costs that you need to be aware of? Take a look at them here.
1. Maintenance costs
Before you sign the lease, you should make sure that it is your responsibility to pay for maintenance services on the office space. If you have to pay maintenance costs, you need to be sure of the services you will pay for. Maintenance costs may include cleaning costs, services offered by technicians and security guards, repairs, elevator maintenance, parking costs and other services.
This will often be the responsibility of the tenant and you need to ensure that you will be able to pay these costs as they occur.
2. Upgrade costs
You may be wondering what these upgrade costs are! Well, even if you’re moving into a newly built commercial space, you may still need to make minor adjustments to the office space to make it suitable for your company and your employees. It could be simply changing the furniture in the office, adding simple wall art to make the space look more inviting, or changing the color of the ceiling.
Whatever the upgrade, the property owner will never be in the picture and will have to pay out of pocket.
3. Operating Expenses
If you don’t review the terms of the lease in detail, you won’t be aware of the operating expenses you’ll have to pay each month. Operating expenses, including electricity bills, Internet charges, AC maintenance, etc. If it is shared office space, the expense may also include additional charges for the use of discussion rooms, conference rooms, and booths.
Sometimes these operating costs can add up depending on the type of office space and services being used. Therefore, it is very important for a tenant to consider these costs when renting office space.
4. Tax increase
All commercial leases will have a separate term or clause related to taxes and maintenance costs. Sometimes the clause also contains terms and conditions related to the tax increase. Anytime there is an increase in the amount of the tax, the landlord simply passes the increased cost on to the tenant. Although this is the most common inclusion, it is always good for a tenant to know about it sooner rather than face problems later.
5. Costs of pre-existing conditions
Sounds new to a business owner planning to rent their first office space. Pre-existing condition costs are nothing more than the costs you will have to pay to return the office space to its previous condition if you have made any changes during the term of the lease. Most landlords want their property to be back in the same condition when the tenant moves out.
This cost can be really huge if you make a lot of changes to the property during your tenure. See if there is such a clause in the lease term and make sure you are capable of handling it before making any major changes to the property.
All of these hidden costs can come as a big surprise to tenants who have not followed the terms of the lease correctly. As already said, it happens when you are in the wrong hands. An experienced real estate agent takes care of all the terms of the lease and explains them to you in detail. We are one of those property management firms that is by your side throughout the deal and helps you find an ideal office space. Contact us for any commercial real estate requirements.