3 Grow Groups of Office Rental Cost Expenses
Office for rent is the choice of many businesses today. For any business, whether large or small, when it wants to stabilize, develop and expand, the need to do is to choose the right workplace. Based on criteria such as location, area, type of office, etc., the top-condition office rental cost is prioritized by many businesses.
Office rental cost expenses mentioned in the office lease contract
The cost mentioned in the contract is also known as the main cost. These fees are agreed upon between the two parties and are detailed in the contract, clearly listed, and have detailed provisions. Usually, these types of costs will be decided by the lessor or renegotiated between the lessee and the lessor. Types of costs include:
Cost of renting office by the month
This is the type of fixed cost and also the largest fee in the total rental cost. Office rental fees can be fixed by the parties, divided by area, or set a specific price for each office. This type of fee must be paid by the lessee on a monthly and quarterly basis and will change depending on the agreement between the two parties.
Method of calculating rental fee: rental fee per room/month, m2 x total area/month (this calculation method is popular nowadays). Businesses can flexibly pay in USD or VND.
Service fees are usually specified by the provider. Service fees include parking fees, hallway cleaning, public areas, shared areas, and security,… These are small costs, to provide better service quality. and help businesses feel more satisfied and secure when working at the office. Businesses cannot take care of their cars or clean toilets…
Cost of electricity used
The cost of electricity used in the business is obvious and nothing to worry about. There will be an electric meter to measure the amount of electricity consumed every month. Businesses will pay based on the amount of electricity consumed, simple, clear, and transparent. Do not forget to record the number on the electricity meter when starting to work at the office.
Cost of restoring the status quo when returning the office
When receiving the handover of the new office from the building management, there will be a handover receipt between the two parties. It will detail the current state of the office and details of the equipment provided. At the end of the contract, the lessee does not need to continue renting, or for any reason, that leads to the termination of the lease. In addition to the business having to move all furniture, it is necessary to return it to its original condition. Or there will be some costs for the management to recover the losses during the use of the business.
Types of equipment and facilities that enterprises need to check when receiving the handover: walls, partitions, wall-mounted devices (lights, ceiling fans, air conditioners), carpets, curtains… current items yes. Or businesses can take pictures of the status of receiving and handing over, to avoid future problems.
The “hidden” surcharges in the contract of office rental cost
These types of costs are mentioned in the contract, but if you don’t look carefully, the business can easily ignore them. This causes costs incurred that businesses cannot expect. Need to know to arrange appropriate work, avoid unnecessary arising.
Surcharge for working overtime
The office rental rate shown on the regular contract is the price applied during office hours (8 hours/day and 5-6 days/week, within the time frame specified by the building management). If businesses work outside the prescribed time, there will be fees for the management to pay for security guards, electricity, water, and sanitation in common areas…
This type of cost is not fixed, usually calculated by the hour, by room/hour, by equipment/hour, or by area/hour. If the business often overtime, overtime, pay attention and negotiate with the management from the beginning.
Of course, businesses cannot look after their cars while working. In some large buildings, with enough parking space, businesses will pay directly to the management, or have to park parking lots near the company. The parking of the car in outside places needs to be safe and it is best to choose buildings with basements and large parking lots for convenient transportation and saving time.
Rental cost during office relocation
Except for the package office service, when choosing an office for rent by area, any business will need to arrange and set up the office accordingly. Construction and installation will take about 7-15 days. At this stage, the business needs to negotiate with the investor a reasonable price. Many rental units will be FREE for 7-15 days for businesses to move offices and set up again, or only charge electricity and water fees…
You can read the previous article here: Necessary Office Rental Infrastructure Utilities
What types of costs increase with the cycle
There are two types of costs with cyclical time variability and market influence. These are the issues businesses need to pay attention to because it affects the uptime a lot later.
Costs vary with currency rates
For businesses paying in Vietnamese Dong, this issue is not affected. But for office leasing units, and foreign businesses that pay in dollars or other currencies, this is an issue that cannot be ignored. At different times, the exchange rate is different, so when converting into units of Vietnam dong, there will be a difference causing losses and affecting the budget.
Variable fixed rental costs
According to a 12-month or 24-month cycle, depending on the rental unit, the rental price will be adjusted. Increase from 5-10%/year depending on the annual inflation rate and the office leasing market. Adjustment level and time for price adjustment will be clearly stated in the rental contract.