If you are just starting your business, you probably want to use most of your capital on inventory and advertising. You do not want to spend thousands of dollars on an office space that may soon be too small for your growing company. Even if you are an established business owner, you may not want to buy an office space if many of your employees will be working from home. In these scenarios, you may want to lease real estate instead. Before you rent your new operations headquarters, you should understand the main types of commercial leases. 3 Categories of Commercial Real Estate Leases 1. Net Lease If you sign a net lease as a tenant, you are directly responsible for some of the building’s operating costs. With a single net lease, you pay a portion of the property taxes. A double net lease requires you to pay parts of both the property taxes and insurance, while a triple net lease forces you to cover some of the common area maintenance expenses, as well. 2. Gross Lease A gross lease does not include operating expenses. Instead, the landlord uses your rent to pay for those costs. As a result, the rent for a building with a gross lease is higher than it is for a building with a net lease. 3. Modified Lease As its name implies, a modified lease is a combination of net and gross leases. It allows the tenant and the landlord to negotiate the base rent and the division of operating costs. Lease Real Estate for Your Business Buying office space can be expensive. Renting is a more cost-effective option for you. Before you lease real estate, review the types of commercial leases and figure out which is best for your needs.
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AuthorHello, my name is Roger Dennison and I'm a successful commercial real estate broker, with more than 20 years in the field. Archives
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