Leasing Premises
Looking into leasing premises for your business?
Depending on the business model you select for your small business, leasing premises is one of the options you may have to investigate during the design phase of your small business startup.
What is a Lease?
A lease is a legally binding agreement between a property owner (landlord) and the tenant. Generally the agreement will be for a set time frame, and at the end of the lease you can either vacate the premises or negotiate with the landlord to renew the lease.
Advantages and Disadvantages?
Advantages of leasing:
- Little or no capital investment is required
- If the business fails, the premises can be sublet to minimize the financial losses,
- As the tenant you are not responsible for property taxes, building insurance or repairs and maintenance for the building,
- Leasing is more flexible than owning the building as you can relocate at the end of the lease period.
Disadvantages of leasing:
- You are subject to the conditions of the lease, (i.e. what you can and can?t to the base building) and will be subject to rent increases,
- The landlord may decide to sell the property and you will be required to quit the premises and relocate elsewhere.
- You have not investment in the property.
Some of the Things You Need to Consider
Before you race off and sign the first lease document that the agent puts down in front of you, there are a few things that you need to consider.
- Condition and suitability of the property for the purpose you have in mind,
- The terms of the Lease and any conditions,
- How often the landlord will be able to review (and increase) the Rent, and
- Whether or not your can assign or sub-let the leased premises to another party.
Could you use a Premises Checklist?
Here it is! Just click on the Premises Checklist link to download a printable copy.
