Starting a business is definitely exciting. In line with such excitement, most of first time businessmen would start their business by buying their own commercial space. However, though the idea of owning a premise is somehow good and promising, still it would be best to try leasing first.
There are many advantages of leasing a commercial space, it would not only hasten the commencement of your business operation, but it will also save you some money in case the business will flop. Now in order to help you in your leasing decisions, here below are "the different types of leases" to help you make an informed decision," as also discussed by propertycluster.
Gross Lease
By choosing this option, which is otherwise known as full service, you would be allowed to pay an all-inclusive rent to the owner or landlord. In return to the said payment, full services and expenses would be shouldered by them which would include but not limited to taxes, insurance and maintenance fees. Having this set-up would then make it easier for you to have a forecast of your expenses.
Net Lease
In contrast to the first type of lease, Net Lease would oblige you to pay other services such as property insurance, maintenance of common area, trash collection, parking lot, real estate taxes and other utilities, such as water and sewer, as highlighted by propertycluster. This set-up can be classified into four subcategories namely; Single Net Lease, Double Net Lease, Triple Net Lease, Absolute Triple Net Lease, and each option would similarly result to a lowered rent.
Modified Gross Lease
Considered as the final type of commercial lease, Modified Gross Lease is more favorable for tenants. According to propertycluster, "tenant pays a lump sum amount to cover the rent, property insurance, property taxes and expenses for common area maintenance. The tenant pays for utility consumption and janitorial services separately. Usually, the landlord and tenant tend to come to an understanding that allows them to decide on what net amounts are made part and parcel of the rent."
With these three types of leases and their subcategories, renters or business owners are guaranteed of flexibility and financial freedom. It would also be better to consult first property consultants so as to be guided on what option to choose based on your particular line of business.
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