Category: Commercial Real Estate For Lease (page 2 of 2)

Renting an Office Space vs Leasing an Office vs Buying an Office

As a business owner, you may be thinking about getting an office and one of the biggest decisions you will make is choosing between renting an office space or leasing or buying an office.

We’ve been selling and leasing offices in Perth for over 30 years and have extensive experience helping business owners make the right decision for their business and their finances. We’ve listed the pros and cons of renting an office space vs leasing an office vs buying an office, to help you decide which is the right option for your business.

Renting an Office Space

Renting an office space usually refers to a short term lease for one office or desk in an existing office complex. You’ll have the option of “hot desking”, “co-working” or renting an office for yourself.

The facilities will depend on each office space but can vary from large offices with views in high rises in the CDB to communal areas where you can use any available desk. Office space rental prices will vary on the type of office space, the building, facilities and amenities with rental terms from 1 hour to 1 month.

Pros of Renting an Office Space

  • Flexibility: You can rent an office space in Perth by the hour, day, week or month.
  • Availability: Most office spaces for rent that are listed are usually available immediately.
  • Only Get What You Need: You don’t need to think about the office space size you’ll need in 6 months or a year. Only pay for the office space you need right now.
  • Networking Opportunities: If you choose co-working with others or hot-desking, you’ll have the opportunity to meet other businesspeople and build your network.
  • Amenities Are Provided: Most office spaces for rent come with printing facilities, coffee/tea and internet.
  • No Maintenance Costs: You won’t need to pay for a thing but your rent. Everything else is paid for by the owner.
  • Low Commitment: You won’t need to commit to a year-long contract. The longest commitment for short term office space is a month.
  • Central Locations: By renting an office space, you’ll be able to choose a location that would otherwise cost a lot more to lease or buy. This is a huge pro if you need to have meetings in a CBD.
  • Less Responsibility: You’re not responsible for anything apart from your rent costs. You can focus on your business and not maintaining the office.
  • Tax Deductions: The costs of renting an office space can be tax-deductible.

Cons of Renting an Office Space

  • Shared Office Spaces: Renting a shared office space means you can have other people in the same room or even on the same desk. This could be a distraction or impact your productivity.
  • Less Control: You’ll be at the mercy of the environment in the office space, this could be noisy people in the hallways, music from another room, untidy areas, low internet speed or poor lighting.
  • No Branding: Because of the short rental lengths, landlords will be reluctant to add any signage to the office.
  • No Power: Owners can decide not to offer renewals or rental extensions of the office space without warning.
  • No Equity: You’ll be spending money on your business but it will be going straight to the office space owner and not building equity for you.

Leasing an Office

Leasing an office refers to long term leasing of a whole office building, multiple floors of offices within a building or a suite within an office complex. It will usually include private amenities and facilities like parking, toilets, storage and kitchen.

Lease terms are negotiable but are usually between 6 months and several years, providing businesses with security that they can occupy that office for a long time.

Pros of Leasing an Office

  • Stability Without a Large Financial Commitment: Leasing an office will allow you to secure an office for years without having to outlay the high cost to buy an office.
  • Low or No Maintenance Costs: The owner will bear most if not all of the costs for repairs, upgrades and ongoing maintenance.
  • Tax-Deductible Lease Payments: Your payments for leasing an office can be tax-deductible
  • Prime Locations:Lease an office in a prime industrial location or CBD, at a fraction of the cost of buying an office.
  • Can Be Cheaper to Lease Than Buy: Depending on the commercial property market, it may work out cheaper to lease an office than buy one.
  • Easy to Leave: If you’ve outgrown the office space or need to change for another reason, you can exit at the end of the lease without the process of selling an office property.
  • Branding and Street Presence: You’ll be able to negotiate with the owner to add your signage to the building and your office.
  • Free Up Cash for the Business: Avoiding the large financial commitment of buying an office will keep cash available to spend on your business.
  • Choose a Long or Short Term Lease: You’ll be able to lease an office with contract length that suits your business.

Cons of Leasing an Office

  • Increase in Lease Payments: It’s fairly standard for your lease payments to increase either after a certain term or if you choose to renew the lease.
  • Owner Has the Power: The owner may choose not to renew your office lease and you’ll be forced to move from the office.
  • No Say in Repairs and Maintenance: The landlord has the power to determine which repairs are done and when.

Buying an Office

Buying an office can be a whole office building, multiple floors of office within a building or an office suite within a complex.

Buying an office gives you full control of the property but can cost significantly more than renting an office space or leasing an office.

Pros of Buying an Office

  • Build Equity: Owning an office will become one of your largest assets and you’ll be able to borrow against the equity of the property.  
  • Capital Growth: The value of the office will grow with the property market.
  • Freedom to Make Changes: You’re in control of everything and develop the property as you see fit. No more landlords.
  • Expanded Income: Lease out extra space in the office or the entire office if you decide to relocate.
  • Steady Payments: Your mortgage payments will be steady as opposed to increasing office lease payments.
  • Tax Deductible: Interest payments and depreciation are tax-deductible.

Cons of Buying an Office

  • Large Upfront Costs: You’ll be paying a significant amount to buy the office as well as taxes and fees.
  • Less Cash for the Business: The money you spent buying the office could have been used for other areas of the business.
  • You Pay for Everything: You’re the landlord, all fit-outs, repairs, rates and maintenance costs are paid by you.
  • Lack of Flexibility: You’re financially invested in the office and can’t relocate as easily as renting or leasing an office.
  • Financial Risk: If you can’t afford the cost of the office, you may put your personal assets at risk.
  • Selling Could Be Slow: There’s no guarantee that you’ll be able to sell the property if you need to. You may lose money if the office sits on the market for too long.
  • Could Sell for a Loss: If the market is down you may make a loss if you sell at the wrong time.

Get Advice from Local Experts

Before you commit to one of the options above, speak to the Perth commercial real estate team at Ross Scarfone Real Estate. We specialise in leasing and selling offices and warehouses in Belmont and the surrounding areas.

You’ll be able to tour the available office properties and we can discuss options that will suit your business and financial positions.

Contact us about your commercial real estate needs

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Find The Perfect Warehouse to Lease With Tips From Commercial Property Experts

If you’re thinking about a new warehouse to lease in Perth, or anywhere, it can be an overwhelming task and unless you’re a commercial property expert, it’s easy to feel that you’re under-informed. All of this can lead you to make a poor decision on the warehouse you rent and it having a significant impact on how your business runs for the length of the lease.

Fear not! We’ve gathered some Perth commercial property experts to put together a list of easy to understand tips that will help you be better informed when looking at Perth warehouses to lease and put you in a better position to negotiate the price of your rent.

What To Do Before You Start Looking at a Warehouse to Rent

Plan Ahead…Far Ahead

Looking for a warehouse to rent just before you need one puts you under pressure to find one to lease and it puts you in a weaker negotiating position. The longer lead-in time you give yourself before you need to lease a warehouse, the better your negotiating position will be. You’ll be more informed of what properties are available and how the warehouses you’re considering compare to others that have been in the market.

Planning at least 6 months in advance will also give you enough time to better understand the requirements you have for your next warehouse rental. In this time, you’ll be able to speak to your managers to learn what they think the features of your next warehouse should be. For example, you may need extra loading bays, larger office space or more advanced safety requirements.

Keep an Eye on the Commercial Property Market

By monitoring the commercial real estate market in Perth, in particular warehouses to lease, you’ll give yourself the opportunity to jump on a deal if the market dips. This could end up saving you thousands of dollars in rent each year.

If you’re watching the warehouse lease listings of local commercial real estate agents, you’ll also be able to see which have been sitting on the market for the longest time. This could mean that the owners are eager to get the warehouse leased, giving you an opportunity to negotiate better terms.

Commercial Property Expert Tip #1:

The latest warehouses on the lease market will usually sit at the top of the major commercial real estate websites, but sometimes old listings will be advertised at the top of the list. To get the best understanding of which warehouses have been on the market the longest, head to the website of the commercial real estate agent to find their list of warehouses and head right to the back of the list.

Commercial Property Expert Tip #2:

Subscribe to the email mailing lists of the commercial real estate agents that lease warehouses in Perth. Commercial property agents will regularly send out emails and you’ll be the first to know when a new warehouse appears on the leasing market, and you can be the first to view it. Potentially meaning you won’t have any competition to lease the warehouse, and you will be able to negotiate better lease terms.

Know Your Limit

Before you even consider looking for a new warehouse to lease, you need to have a comprehensive understanding of what rent you can afford to pay. Once we see something we like, we all tend to push beyond our budget to get it. By setting a strict budget for what you can afford, you’ll reduce the risk of putting yourself in a risky financial position by overcommitting.

What to Look for in a Warehouse to Lease

Now that you’ve done your research and are prepared to start looking at warehouses to lease in Perth, here are a few tips from commercial property experts on what to look for.

Think More than Square Metres

When looking at a warehouse to lease, you not only need to think about square metres, you need to think about cubic metres. The cubic meterage of the warehouse will allow you to calculate how much storage space you have.

When considering a warehouse to rent, it’s important to look at the height of the building and whether your storage racks, equipment and machinery will fit. Make sure to measure the height of the access doors as well when looking at the height of the warehouse, you need to be able to get your equipment inside the warehouse.

If you’re not storing stock in the warehouse or have tall equipment, you may not need to lease a warehouse with a high ceiling and can focus on finding a renting a warehouse with lower ceilings.

Commercial Property Expert Tip #3:

If you know which warehouse features are, and aren’t, valuable to your business before you start negotiations, you may be able to lease the warehouse for a lower rent. For example, some businesses will need a warehouse with a high ceiling and will end up paying more for this feature, but if high ceilings aren’t as valuable to your business, you can negotiate down the premium placed on this feature. 

Commercial Property Expert Tip #4:

When it comes to warehouse space, it’s better to overestimate what you need, rather than underestimate. You don’t want to be looking to lease a new warehouse in a years’ time because you’ve expanded beyond the space.

Will You Need Office Space?

Most warehouses for lease come with a small office for a manager to oversee the staff, but if you’re looking to run your entire business from one location, you’ll need an office warehouse to rent. Once you decide you need extra office space in your next warehouse, there are a number of additional factors to consider.

How Much Office Space Will You Need?

You can roughly calculate the square metres you’ll need for your office, by adding up the number of employees you’ll have in the office as either a:

  • Standard desk/cubicle
  • Standard Office
  • Supervisor/Manager work area
  • Supervisor/Manager Office

You can download the exact calculations in our guide How to Choose an Office Space to Lease in Perth.

What Office Features Will You Need?

Here is a couple to consider:

  • Male and female toilets
  • Lunchroom
  • Server room
  • Boardroom or meeting space.
  • Printer and stationary storage.
  • Kitchen

Ask About Everything

You should know a warehouse, inside and out, before you even start negotiations. There are a number of things that you could assume are up to scratch only to find out later that it’s not! Here are a few warehouse features you should ask about with every property you view.

  • Air conditioning and heating: This needs to be able to deal with your staff and any machinery that might be generating heat. If you have stock that needs to be stored at a certain temperature, you need a climate control system you can rely on. Enquire about the age of the warehouse’s systems and when they were last serviced.
  • Safety and security: Your entire stock and machinery inventory could be stored in your warehouse, not to mention your staff. You need a security and safety system that will protect everything in your warehouse from fire and burglary.  

Commercial Property Expert Tip #5:

If you’re going to be running machinery in your warehouse, potentially all day, you want to know that the warehouse’s wiring has the electrical capacity to handle the workload.

What Are Your Distribution Needs?

The distribution of your products and intake of supplies is a major aspect of your business and you need to know that the warehouse you lease will be able to streamline your receiving and distribution as much as possible. Here’s what our expert suggest you keep in mind when looking for a new warehouse to rent:

  • Loading docks: If you need loading docks, make sure they will suit the types of trucks you’ll be using and the area around the loading dock is large enough for them to maneuverer.
  • Access to freeways: How far will your vehicles have to travel to access the major freeways that can take them both around Perth and interstate?

Commercial Property Expert Tip #6:

Be aware of the council restrictions on heavy vehicles around the warehouse. Certain residential zones prohibit trucks and industrial vehicles from travelling through them, meaning you and your suppliers may have to go around the entire area.  

Speak to a Commercial Property Expert

If after reading this article, you’re still not sure of what your warehouse requirements are or where to find the perfect warehouse to lease, speak to the local commercial real estate experts at Ross Scarfone Real Estate. We specialise in commercial and industrial buildings for lease in Perth’s south-east corridor of Belmont, Welshpool, Kewdale and surrounds. You can view our entire list of warehouses and office warehouses to lease and request a tour of the available warehouse properties in the area.

Contact us today for all your warehouse real estate needs

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Guide to Perth Office Lease Negotiations and Contracts

Ready for a new office in Perth?

Before you do, read this 10-page office leasing guide and enter negotiations informed and confident.

In the guide you’ll learn:

🔘 When is the best time to look at offices
🔘 Calculating your projected growth
🔘 How many sqm per person you’ll need
🔘 Prioritising building features
🔘 Get the location you want for less
🔘 Understanding the lease agreement
🔘 Fixed vs variable rent
🔘 What is a “make-good” clause?

Make better business decisions

Whether you’re looking to grow your business, expand your investments or shift into a new market, if you need to lease office space in Perth there are a number of things you need to consider.

Leasing an office can be a daunting task, there can be a lot of money at stake and you could be making a choice that will impact the profitability of your business for the next few years.

In the free download “How to Choose an Office Space to Lease in Perth”, we take you step-by-step on what you need to do to successfully lease a Perth office that you’re happy with, starting from 6 months before you need to move.

Why You Need This Guide

Not only does this guide detail what you need to consider when leasing your ideal office, but it also includes tips on how to give yourself more negotiating power when it comes to signing a lease for a Perth office property.

We’ve created a guide of the top 8 questions you need to ask yourself before leasing an office. This guide is a must-read for any business looking to rent an office in Perth.

Download the guide to finding an office in Perth.

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