How to choose the right commercial lease

There are several different types of commercial leases, each having its unique financial implications.

Understanding the differences is crucial to selecting the best one for your business.

• Gross leases include most costs like taxes, insurance, and maintenance within the rent. They offer more predictable monthly expenses but may come with a higher upfront cost.
• Net leases require the tenant to pay some or all the property-related expenses. These offer lower rent but add complexity in budgeting and financial planning.
• Percentage leases involve paying a base rent plus a percentage of sales. These are suitable for retail businesses but require careful consideration of the financial model and whether the business will make enough sales for you to profit.

The flexibility to negotiate terms can allow you to alter a lease to suit your business needs. Including the duration of the lease, the existence of regular rent reviews, break clauses, and outlining your responsibilities for repairs and improvements.

Different leases may also offer tax benefits or obligations. For example, the ability to deduct rent as a business expense can be a significant advantage for small businesses.

We can provide tailored support to help you make informed decisions that enhance your portfolio’s success. Get in touch to find out more.