How to determine lease term when leasing office space?

Commercial office space lease involves a number of features that are important in many ways, such as the period of the lease term. Residential leases are usually on annual basis, but the term of commercial leases can vary depending on many factors, including your convenience and choice of the landlord. When you take a decision to lease the office space, then certain factors should be taken into consideration to determine the lease term, such as:

Future plans

Business owners who are confident that a particular area is right to start their business can take office space on lease for a longer period. Reason behind this statement is that unless you are planning to purchase your own office space within a few years time, you should prefer to stay at your current location as long as possible. This will help you to establish your business at one location, till the time you are ready to buy an office space.

Location

If you are looking for a lease option in a particular area and are sure that it will be beneficial for your business, then you can lease for a longer period of time. However, if you are still testing the local market of a particular area, then you should lease for a shorter term. So it depends on the location and the growth prospects it offers whether you should take a lease for a longer or shorter period of time.

Economy

If you are considering the expenses involved in leasing, then a longer lease will prove to be more beneficial. A lease which is taken now will become costlier after some years because of various factors, like inflation. But one thing that needs to be checked before taking the lease is that you should enquire that whether the lease amount remains constant for the entire lease period or not. Some property owners allow the lease amount to be uniform throughout the lease period, while some keep on increasing the rent after a particular duration. If the lease amount remains uniform, then it can be a good deal for you.

Business goals

If you have plans to expand your business in future and increase the number of employees working in your company, then a short lease term is a good option, because you might need a bigger office space in future so as to accommodate your employees. On the other hand, if you have no plans of expanding your employee base and the office space is also sufficient, then you will not be required to move to a bigger office. This means you can opt for a lease for a longer period of time.

Preparing a gist of the above written statements we can say that leasing office space is a good idea, but while taking a decision regarding the lease term proper thinking needs to be done and a correct decision that suits your current purpose, as well as future goals, needs to be taken.

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