Finding the correct commercial property can be a long process but it is important to rent the right premises for your business. With so many property agents in the market and fluctuating housing rates, it is easy to get confused in the process.
Renting commercial property, regardless of how long you will occupy the premises is an intricate process for your business. Below is a detailed checklist to help you make better decisions when it comes to renting commercial premises.
Choose the right location
Choosing a befitting location for your enterprise or business is essential to performance, sales and eventually, profits. It is vital to be sure whether you want to rent property in the city, an industrial estate or at a retail park.
Location is the thin line between a successful business and an average performing one. For instance, it makes less sense to open a stationery at the downtown, where most nightclubs in the city are located.
When choosing a location, put the following into consideration:
- How heavy is traffic around that part of the city? What is the congestion fee?
- Local government charges.
- Parking space and parking restrictions in the area.
- In case you have to deliver something from the business premises to a client, how long will it take?
- Are there any huge noisy industries near your potential commercial property?
- Tips for finding conveniently located commercial property for rent
- Find a location that has a huge traffic of potential customers passing by every day.
- Make certain that you are located considerably close to your key suppliers, target market and any partner businesses.
- It is more business wise to have public transport links close to where you are located.
- If you are shipping in high-end goods, choose an extra secure and low key location to rent commercial property.
Remember that whichever location you choose, there will be both benefits and downsides. Therefore, make a list of both the advantages and disadvantages of renting property in a specific location, before signing the lease.
Business rates are defined as the local taxes that are paid by all occupiers of commercial property in England and Wales. Find out your business rates by multiplying the value of the premises by a Multiplier(a factor determined by the government).
The 2016/2017 multipliers for standard businesses in England, Wales and London were 49.7p, 48.6p and 51.7p respectively. The rates were significantly lower for small business property owners in England and London, at 48.4p and 49.7p respectively.
Assuming you rented commercial property in London, with a rateable value of £12,000, the total business rate would be:
£12,000 X 49.7p = £5,964
Look out for small business relief, which makes you eligible to pay lower business rates. Note that businesses in the rural settlements are entitled to up to 50% business rate relief. Keep in mind that buildings for the welfare of people with disabilities, church halls, public religious worship premises and agricultural buildings are excluded from the business rates.
Now that you are aware of where to set up your business and how to calculate business rates, have a look at local authority charges. Make sure that you have money in your budget assigned for:
- Insurance charges.
- Operation costs (water, lighting and cleaning services). Please, remember to ask the landlord for an Energy Performance Certificate, before you can finalise the lease. However, the EOC is not mandatory if you are renting already serviced office space.
- VAT might apply on some buildings. If you rent a commercial property that is registered for VAT, you must pay VAT on all service and rent charges at the said property.
- The last step of renting commercial property is exchanging and completing contracts with the landlord. Only complete with the contracts after the surveyor has done a thorough and satisfactory check on the building and when both you and the landlord are satisfied with the contacts. The contract is completed once all payments are made and you have received the keys to your new commercial property.