The process of renting doesn’t have to be a stressful operation. There are several things you need to consider before making the all-important decisions, and we have curated a list of the most important to think about to ensure you find the right property for you and your business.
The type of commercial property you choose holds a lot of value. You will need to decide which best suits your needs. Are you looking for a small, simple space to start with? Or do you desire a larger property with more breathing room to grow?
If you are expecting your business to develop soon, it makes sense to look for a property that is big enough to suit your needs.
Once you’ve found ‘the one’, it is still important that you consider all options. Just as if you were purchasing your first home, the location is one of the most essential factors when choosing a commercial property. Researching the area with a fine-tooth comb will prevent you from choosing somewhere unsatisfactory since many contracts will tie you to a property for as long as five years or more.
The proximity of competitors isn’t always a negative factor when selecting a location. It could put you in the spotlight, but it might be something you are unsure about. There are also many other numerous considerations in regards to location, which include:
The overall condition of a property will make or break your decision. As you become aware of any damp, plumbing or other issues that may need questioning, you can discuss this with your potential landlord and either arrange for them to be fixed before signing or search elsewhere for something more suitable.
There are numerous costs you are likely to incur when renting which you need to be aware of during the initial research before signing your tenancy agreement, including rental costs, business rates, services charges, and professional fees.
Rental costs will vary depending on the space, but it will be your largest expense when leasing a property. For smaller businesses, it’s wise to have a guarantor for your rent. If you are unable to provide one, a rental guarantee could be necessary. The guarantee will be deposited into an untouched account which the landlord will be able to withdraw if you do not commit to your responsibilities.
Business rates are calculated based on the rental value of the property, and contents insurance is essential for any company wanting to keep its possessions protected. In certain properties, you may be responsible for paying building insurance.
The definitive part of any lease is the professional fees. If you’re planning on obtaining a longer-term lease, it may be wise to hire a surveyor, despite the significant costs that are usually attached. In regards to service charges, much as you would when renting a residential property, you will likely be responsible for covering bills, such as gas, internet and electricity.
In most cases, your deposit will be the equivalent of three to six months’ rent. A lot of buildings will have VAT requirements, meaning that you will be expected to pay VAT on rents and services charges. These are all considerations you should discuss with your landlord before your tenancy agreement to ensure you are aware of the expectations.
It’s important to know exactly how long you can lease the property for when the lease starts and whether you can renew your lease if necessary.
Most landlords will provide various options for the renewal of your lease, which you should determine before signing the agreement. Some leases may renew automatically, and, in some cases, the landlord may choose not to renew the lease.
The landlord needs to be clear about the length of the lease from the beginning and should specify any circumstances where there is a possibility to break it.
Newer landlords often know less about the building, whereas landlords who have owned the property for a substantial period will have greater knowledge and expectations when renting it out to tenants. A new landlord could also potentially have a large mortgage, meaning the rent will be higher than if it were owned by someone for a long time.
The property market can be unpredictable, especially in recent years where the unexpected has occurred. It is good to know when the rent will be reviewed and what the estimated rise will be.
With long-term leases, the tenant is often responsible for utilities and running costs, which may include water, gas, electricity, heating, and service charges.
If property improvements are required in your rented property, you need to know who is responsible for covering these costs. Any changes to the property, including decor, may demand the landlord’s permission.
Some landlord’s property insurance will cover tenants, but you need to make sure you are fully covered by them or your insurance policy.
The Sloane Stanley Estate has been part of Chelsea for over 300 years and remains a family business today, owning and managing over 250 shops and flats. The estate aims to be a proactive landlord who is fair and reasonable in all their dealings with residents, agents, contractors, and members of the public.
If you are interested in renting a commercial property for your retail business, get in touch with us today to discuss our delightful spaces in the heart of Chelsea.