When you decide to start your own business and need commercial property to make your dream a reality, one of your most important decisions will be whether to buy or lease the property. In many cases, it is more advantageous to acquire a commercial lease, since lease payments can be deducted on your tax return, easing your tax burden as a business owner. If you are ready to acquire a commercial lease, here are five steps involved in the process.
Set Your Parameters
First, narrow down the type of commercial property you want to lease. Along with how big or small a building you need, also consider the zoning requirements where the property is located, its accessibility to customers, and how much money you are willing to spend to acquire the lease.
Find a Commercial Real Estate Broker
Next, work with a commercial real estate broker. Since they specialize in commercial property, this type of broker will know current market conditions, the best properties that are currently available, and possess in-depth knowledge of market pricing and financing options.
Hire an Attorney
Before you ever sign on the dotted line for a commercial property lease, hire an attorney such as Ashley West of Carter West Law to handle the transaction on your behalf. Due to the many details that are involved in commercial real estate deals, it is always best to work with an attorney who has extensive experience with real estate contracts and other related matters.
Choose the Best Type of Lease
Not all commercial real estate leases are alike. Once you start examining various properties and their leases, you may find some come with a full-service lease, while others may have a net lease or modified gross lease. Since each will have advantages and disadvantages, rely on the advice of your broker and attorney to choose the one that works best for your business and budget.
Negotiate Your Terms
As you begin the negotiation process for your lease, you will submit a Letter of Intent (LOI) to the property’s landlord or broker. This will include a description of your business, your desired terms, and any other information you deem necessary. Expect to get a counteroffer to your letter’s terms, so plan on letting your attorney and broker handle most of the negotiating.
By knowing what to expect when acquiring a commercial lease, you can start your business with a lease that is fair, reasonable, and fits in well with your company’s beginning budget.
