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12 Important Notes When Renting an Office for Lease

12 Important Notes When Renting an Office for Lease

Finding office for lease is one of the most important steps in running a business. However, in the process of looking for office rental, businesses often encounter mistakes that make office rental ineffective as desired.

Don’t just care about the office for lease cost

Don't just care about the office for lease cost

Many businesses and tenants in the process of looking for office rent only pay attention to office rents and compare high and low, but do not know that the actual rent is only a part of the total cost that customers have to pay. pay to operate a workspace. So stop choosing buildings based on unit price comparison. Please summarize the following types of expenses:

  • Rent cost
  • Service charge
  • The electricity bill for the air conditioner
  • Electricity consumption in the office
  • Parking fees for cars and motorbikes
  • Overtime expenses (if the business regularly works overtime)
  • Tax

Only when summarizing and estimating the total cost can you make the most accurate assessment of the office rental price and choose the building that best suits your business’s finances.

Don’t rush to deposit if you haven’t negotiated the Contract yet

A typical office lease negotiation process will include two steps:

Step 1: Sign the letter of invitation to rent and transfer a deposit equivalent to 1 month of office rent

Step 2: Sign the office lease contract and forward the deposit equivalent to the next 2 months’ rent.

However, it is a fact that most buildings do not stipulate all issues related to the costs customers need to pay in the invitation to rent, so tenants are easily confused and miscalculated the total cost. Therefore, ask the building owner to send a draft of the Contract and negotiate all issues about costs and terms before making a deposit. Because if the deposit has not been negotiated, the tenants are likely to fall into a weaker position in future contract negotiations and negotiations.

Consider other proposals instead of just the rent

Not all buildings can easily reduce office rents, and it is impossible to reduce prices deeply compared to the current one because this also affects the interests of customers who have rented offices in the building. But instead of just focusing on negotiating the rent, you can move on to negotiating other cost items because after all, the total cost the customer has to pay includes all costs in the contract. Some incentives can be considered such as:

Calculate the most profitable overtime cost for the business

Depending on the building, there are different ways to calculate the cost of overtime. There are three main ways to calculate overtime work today:

  • Calculate by office: For example 300,000 VND/office/hour
  • Calculated by office space: Example 0.02 USD/m2/hour * Lease area
  • Calculated by equipment used: For example, 10 USD/unit/hour, usually a unit (FCU – Fan Coil Unit) cooling for an area of ​​40 – 70 m2 depending on the type of equipment.

Usually, the calculation by office space will be more economical than the equipment used. But with many buildings, customers who do not use central air conditioning will be free to work overtime. Therefore, your business should be based on the need to do more or less to negotiate the most profitable way of charging for you.

If case the building changes over time based on the air conditioner used and cannot negotiate a lower cost, the enterprise can install the local air conditioner by itself (if the technical conditions allow) to can reduce the cost of overtime.

Negotiate overtime fees based on an area of the office for lease

Negotiate overtime fees based on an area of the office for lease

If the office building charges an overtime fee based on the area, i.e. $/m2/h, then you can take advantage of the leased area to negotiate like large office space, then you can offer incentives to reduce the cost of working. out of hours. Or if the building is based on the total area of ​​the office, the fee can be negotiated to a lower, for example, 300000 VND/office/hour, then it can be negotiated down to about 20000 VND/floor/hour. Normally, with large office tenants and long-term contract terms, the building owners will be prioritized, and the negotiation will also be easier.

Please add a discount on overtime fees

Many buildings do not have a specific overtime rate and are often based on an agreement between the tenant and the building owner. This is an advantage so that office tenants can freely negotiate the most favorable terms for themselves and do not forget to ask for more incentives. And often the courts will also create the best conditions for businesses for mutual benefits. With businesses that often work overtime, they can consider and negotiate the time of administrative work.

Information to learn to “make sure” of winning

Negotiating an office lease is one of the most important steps to ensure that your business can rent an office most efficiently and cost-effectively. However, to negotiate with the building owner to achieve the desired result, the business also needs to know some information to get the best mood in the negotiation. The information that businesses need to learn to “make sure” of winning when negotiating office lease contracts.

You can read the previous article here: Empty Office and Fully Furnished Office

Advantages and disadvantages of office buildings for rent

First of all, you need to understand the advantages and disadvantages of office buildings for rent. Because this is important information to ensure businesses can gain a good advantage to negotiate. To get these advantages and disadvantages analysis information, of course, the support of the office rental agency is extremely important. Please ask the rental consultant to summarize the building information, evaluate and give the plus and minus points for easy negotiation. And based on the limitations to negotiate with the building owner the most favorable terms for the business.

For example, the location of the building is not central and the traffic is not convenient, which can lower the rental price. If the rental space is not square, there are many dead corners… can be deducted from the rental price…

Is there more or less vacant space in the building?

Knowing how much or less the vacant space in the building is also a beneficial factor for you in negotiating an office lease. With buildings that have a lot of vacant space, often building owners will give more incentives to businesses because they want to speed up the process of renting offices and optimizing business. Therefore, businesses will easily negotiate and easily convince the building to get the most favorable terms for them.

Has the premises the business wants to rent been empty for a long time in office for lease?

Has the premises the business wants to rent been empty for a long time in office for lease?

With premises that have been vacant for a long time, often building owners will want to promote the negotiation and rent the best office. Because the space is vacant for a long time, it also means that the revenue of the building owner is affected. Therefore, customers will have an advantage in negotiation. In contrast to the new vacant premises, businesses can choose according to the building psychology and hit the psychology of wanting to rent quickly to exploit the business.

Office tenant movement rate and reasons

Is the turnover rate of office tenants high or low? And what are the reasons for moving offices? Usually, a building has additional vacant space unless it is a new building put into operation, most of the time there will be a few new units moving to the new office. If the building has a high rate of tenant termination, the building owner tends to stimulate demand and bring more incentives to tenants.

Rent and other costs of buildings in the same area

Of course, it is indispensable to summarize the rental fees of buildings in the same area to create an advantage when negotiating. If the building has a higher price than the common ground in the area, you can rely on that to negotiate lower.

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