Leasing Office Space

Posted By Rodger Strouden on September 26, 2008 @ 2:08 am

When the time comes to move your business to a new area or upgrade to a bigger office space, there are a lot of options to consider. First, of course, you have to decide just how much space you’re going to need, especially if your company is quickly growing. A good rule of thumb is to allow at least 150-250 square feet of space for each employee.

Your next decision should focus on whether to buy or rent new office space. It’s a big step for your business and not to be made foolishly, so make sure you do your research first. There are some pros and cons to both sides of the story.

Owning your own office space gives you tax deductions (because of property taxes and mortgage interest) and gives you the freedom to do what you want with the space. You won’t have to worry about a landlord, or breaking anyone’s rules but your own (and of course, the law). Once you sign the contract, it’s all yous, and with a mortgage you have a fixed cost in place.

Of course, there is another side to the coin as well – you are responsible for all the costs and services needed to run an office space, including, but not limited to electricity, water, sewage, trash, internet service, phone services, maintenance services and more. The upfront costs can also be huge because of the down payment, any property upgrades that must be done, and other maintenance. Plus, once you sign the contract, you own the building lock and key – meaning if your company experiences a large growth spurt (or, unfortunately, a downsize) you may find yourself with not enough OR too much space on your hands.

Flexibility is a big pro in favor of leasing an office space. You can often renegotiate for more space if you grow, or simply move to a new building when your lease is up. There’s also a smaller initial cost associated with leasing your own space. You sign your contract and you pay a set price per month that usually includes typical office services and equipment.

Leasing can save a lot of time and headaches, in addition to upfront costs. By leasing your office space, you can focus on running your business and let the landlord worry about the details of the actual building itself. There’s also the fact that you may be able to afford renting in a very high profile area, while buying in such an area may be out of your price range.

Since location can really help or harm a business, it’s definitely an important consideration. A beautiful building in a high-traffic area can easily drive new customers your way. A run down building in the middle of nowhere probably won’t do much for you. The only problem is price – when you’re leasing, the fancier the office, the higher the price and your rent can often go up. So always make sure you read all parts of your contract closely.

A lease for commercial property can often be negotiated and since the landlord wants to rent the property , he or she should be open to the idea. While leasing can often be the perfect solution for many businesses looking to move, it’s important to take all the angles into consideration. Most importantly, do your research to figure out which is the best choice for your business!

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