“6 Tips Before Starting A Shared Office Rental Business”
Are you looking to take advantage of unused space in your office rental building?
If you have unused space you don’t plan to use in your office rental building, then starting to share the space with a side office rental business may be the way to go.
With a shared office rental business, you’ll be able to take advantage of the unused space and improve your cash flow overall.
However, a business that deals with office rentals target a different market than you may be used to interacting with. But don’t worry…
In this article, we’ll talk about the office rental and 6 tips that you will need before you start renting your unused office space.
Things To Consider In Opening An Office Rental Business
As a commercial property management company you need to know the types of buildings you are managing and how to make them profitable when renting them. If you have a large building that is not completely filled with commercial renters then you might consider opening rental to a shared space or office rental business to bring the capacity of rentals for that building up to 100% rented.
When considering opening a shared or rental office business you should consider the needs of investors and building owners to make sure that the building is used for the purposes it was intended.
Prior to opening or going into office rentals and or shared office space rentals you need to first understand why you would want to start an office rental business first.
Why You Should Start An Office Rental Business
If your building has empty spaces and is always difficult to hit 100% capacity for rentals then having office rentals or shared space rentals can help you rent out the empty spaces of your building while making additional money doing it. In fact, a market for desk or shared rental space, as well as office rentals, already exists and it is growing rapidly around the world.
Hundreds of websites that are made specifically for this type of market are already on the internet. The concept of renting a place to work is already popular and one of the hottest websites for space for rent is ShareDesk. Even if the rented part is just small desk or small unit, many companies are looking for this type of office rental.
Though the economy is currently in an up and down motion we can’t ignore the rapid growth of different industries. Being able to identify and capitalize the rapid growth of businesses and their needs for all sizes and types of office rentals creates possibilities for higher profits in the property management or office rental businesses. Demand for properties is increasing steadily as the economy continues to grow and as a property owner, you can take advantage of this by developing your buildings into an office rental or shared space rental.
6 Tips In Opening An Office Rental Business
The first step in determining if you can open an office rental business is to look at and evaluate the present commercial buildings you are managing. Are they full or do they have empty unused space that can be converted to office rentals? The ability to make use of the empty spaces in your buildings even though the size of it may be relatively small, it can still be beneficial and useful in earning extra money.
Here are the six tips in opening an office rental business…
1. Know The Difference Between Managing Residential and Office Real Estate
A commercial real estate is usually more expensive compared to residential real estate. Aside from that, these buildings have higher real property tax and it could go up to 50 percent of its actual fair market value.Â
Since a commercial real estate is expensive, it just means that the potential returns are expectedly higher. This having 100 % rentals in your commercial properties is a key to making a consistent profit in your commercial property management business.
2. Office Tenants Doesn’t Have Similar Requirements
Always remember that a commercial real estate and residential real estate are not the same. Same thing goes to its renters and tenants. Depending on the office tenant you have their needs may vary from one type of tenant to another.
Different office tenants have different needs. An example would be the needs of an IT firm would be IT infrastructure and additional cables and computer hook ups in the office space. Where as a lawyer’s office would only need desks, chairs, and maybe a reception area.
As the property owner or manager you should be able to adapt to the needs depending on the tenant you have. Most commercial tenants are usually signing a longer lease contract because moving frequently can disrupt their business. Therefore, being able to adapt to the needs of your tenant is a must.
3. Commercial Landlords Have Different Responsibilities.
Unlike residential landlords, commercial landlords should know how to handle tax issues, maintenance responsibilities, and business permits related to owning office real estate. Since your tenants will be businesses and other corporal entities, it is advisable to give them official receipts by business related government offices.
Also, commercial landlords should be aware that offices are subjected to more stringent inspections by the local government. Make sure that your office rentals are compliant legally and meet the building standards required for your tenants occupying the office or commercial rentals.
4. Choose A Great Location
The competition for office rental properties can be tough. Be sure to choose a location where businesses can be close to their clients. The location should be somewhere that the employees of the business could easily commute in going to the office.
If you know those who will best benefit from your location you can reduce the cost of promotion and marketing the space because can market to a smaller, more targeted audience.
5. You Will Need Commercial Real Estate Broker
Finding a tenant for an office rental business requires a specific set of skills. Commercial landlords often ask help from a commercial real estate broker when looking for tenants to fill in their office rentals.
The reason why a real estate broker is needed is that the negotiations for rental rates are more complicated than the rates of residential properties. Also, the demands for commercial are sometimes harder to meet. Examples of demands include the parking space for the company’s clients and employees, and provision for internal cabling.
6. Ask A Lawyer To Draft Your Lease Contract
Corporate clients tend to examine a lease contract carefully. Therefore it’s best to hire a lawyer to draft the lease contract for you. A lawyer can help you draft a loophole-free lease contract which will help prevent future problems.
Final Thoughts On Opening An Office Rental Business
Take advantage of your unused office space. You can make your business more profitable by taking advantage of managing an office rental.Â
Commercial real estate is different from residential in a lot of ways. Landlords and property managers have completely different tasks and responsibilities. The 6 tips I’ve shared with you are a good guide for when you start your own office rental business with your unused office space.
If you have questions or suggestions, just leave them in the comments below.
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