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Allow yourself plenty of time to negotiate the lease while on search of a commercial property. If you are on a strict time schedule, you may be forced to accept less favorable terms than you would get, had you had more time to properly negotiate and know the basics of how to rent property.
Look to start lease renewal negotiations about 12 months before the term expires, and for new location lease agreements, give yourself about nine months so that you can avoid unexpected situations that could cause delays. The more time you have to research and compare with other properties, the more leverage you will have during negotiation.
Contact other tenants as they can provide you with invaluable information. While existing tenants may not be comfortable sharing their rental rates, you can find out if they are happy with the rate they pay and whether they intend to renew their lease for another term. This will give you an idea of not only the quality of the commercial property but also give you an insight into the landlord’s upcoming situation.
Whether looking for a new commercial property lease or renewing an existing one, allow the landlord to make the first proposal. If you make the first offer, it implies that you want to stay, and that takes away a significant proportion of your negotiating power. Request a proposal in writing then ask for a reply within a specific time frame; about 10 days is acceptable. The longer you wait, the less time and the less power you will have.
If your company is not using all of the square footage, it may be worth negotiating a reduction of your total rented space. This means that you can reduce costs without the landlord losing out if he is able to offer the space to another tenant.
Select the best lease length for your business and use that as a negotiating tool. While a five-year lease may still be the standard, negotiate a shorter or longer one if it suits your specific needs. Don’t be afraid to ask for changes from the norm.
Handy Hints on How to Rent Property
• Give yourself plenty of time to think about the rate and negotiate
• Contact other tenants to give you an idea about the property
• Let the landlord make the first move when making a proposal
Source: Nicholas Baker, Special to Properties
The writer is a freelancer