When a small business owner is looking out for an office space for his/her business, he/she often assumes that the only amount to be paid is the cost of the lease. But one has to be very careful while renting an office space as there are several hidden costs associated with the office space rent that the business owners will not be aware of.
It may be because they are searching for office space on their own or they are in the hands of an inexperienced commercial real estate agent who’s not explained the lease terms and extra costs in detail. This would end them up in serious trouble later which can make them think of vacating the office space. In some cases, they’ll not be in a position to vacate the space as they’ll have signed the contract for a long term.
In order to avoid these conflicts later, the business owners must be aware of the hidden costs associated with the rent.
So, what are those hidden office space costs that you need to watch out for? Check them out here.
1. Maintenance Costs
Before signing the lease, you need to make sure if it is your responsibility to pay for maintenance services at the office space. If maintenance costs are to be paid by you, you need to make sure the services that you’ll be paying for. Maintenance costs may include the cleaning charges, services offered by technicians and security guards, repairs, lift maintenance, parking charges and other services.
This will often be the responsibility of a tenant and you need to make sure that you’ll be able to pay these costs as they occur along the way.
2. Upgrade Costs
You might be wondering what these upgrade costs are! Well, even if you are moving into a newly built commercial space, you may still have to do minor tweaks on the office space to make it suitable for your business and employees. It might simply be changing the office furniture, adding simple wall art to make the space look more attractive or changing the roof colour.
Whatever the upgrade might be, the property owner will never be in the picture, and you’ll have to pay from your own pocket.
3. Operating Expenses
If you don’t go through the lease terms in detail, you will be unaware of the operating expenses that you’ll have to pay every month. The operating expenses comprise electric bills, internet charges, AC maintenance, etc. If it is a shared office space, the expense may also include additional charges for using discussion rooms, conference rooms and cabins.
Sometimes, these operating costs can add up based on the type of office space and the services being used. So, it’s very important for a tenant to bear these costs in mind while leasing an office space.
4. Increasing Tax
All the commercial leases will have separate term or clause related to tax and maintenance costs. Sometimes, the clause also contains terms and conditions related to increasing tax. Whenever there is an increase in the tax amount, the owner simply passes on the increased cost to tenant. Though this is the most common inclusion, it’s always good for a tenant to know it in prior instead of facing problems later.
5. Pre-existing Condition Costs
It sounds new for a business owner who’s planning to rent his/her first office space. Pre-existing condition costs are nothing but the costs that you’ll have to pay to bring the office space back to its old condition if you have made any changes during your lease term. Most of the landlords want to have their property back in the same condition when the tenant moves out.
This cost can be really huge if you make lots of changes on the property during your term. See if such clause exists in the lease term and make sure that you are capable of handling it before making major changes on the property.
All these hidden costs can be a big surprise for the tenants who haven’t gone through the lease terms properly. As already told, it happens when you are in the wrong hands. An experienced real estate agent takes care of all the lease terms and explains them to you in detail. We are one such property management firm that stands by your side throughout the deal and help you find an ideal office space. Get in touch with us for any commercial real estate requirements.