No one likes to feel like they’re overpaying for stuff – especially when it comes to spending your own hard-earned money. Want to hear something we’ve learned from more than 10 years of working with small businesses? When it comes to paying for renting office space for your business, it’s easy to fall into the trap of getting a cheap lease and then paying big on other expenses that come along with the low price tag.
Many of our customers come to us from cheap office space in less-than-desirable locations and they all have stories. We hear stories of being broken into or paying ridiculous utility bills on old, dilapidated buildings that lack proper insulation. Some even had a great location with a decent landlord but didn’t realize it would cost an arm and a leg for each conference room meeting and photocopy.
At RISE Commercial District, we take pride in offering all-inclusive leases on both office space and warehouse space. That means, every single lease comes with the full list of amenities that we offer – 24/7 accessible, video-monitoring viewable from any smart device, conference room access, shared receptionist, free coffee, complimentary WiFi and so much more. No utilities to pay. No internet to set up. All turn key and ready for you.
So what are some of those hidden costs of cheap office space that businesses need to know about?
Hidden Cost of Cheap Office Space #1: Utilities
Utilities can be a big budget item, especially if you’ve got a lot of space that is not well insulated. Cheap office space is usually cheap because the landlord hasn’t invested a lot of money into the space itself. Maybe the owner got a deal on the property and it’s one of many commercial properties he or she manages. That usually means, they aren’t overly concerned about how well operations are running for you and your business, especially if they’re passing the operating expenses onto you. Electricity, gas, and water can add nearly $1,000 or more in monthly expenses depending on the type of building and the amount of space you have.
Hidden Cost of Cheap Office Space #2: Amenities
For many cheap office spaces, there are very few, if any, amenities included in the rent amount. Internet will cost an average of $120 per month, not to mention the time it takes to set up the service and ensure that things are running smoothly on your network. Sometimes, there’s a shared conference room and break room. Other times, it’s on your company to furnish a conference room table, microwave, coffee maker and refrigerator – not to mention the coffee itself. All of these things can add up quickly for a business owner starting out or in the growth phase where there’s expensive equipment to be purchased and critical roles to be hired (payroll is the largest expense for most companies).
Hidden Cost of Cheap Office Space #3: Taxes
Some landlords pass on the property tax bill twice a year. These taxes can be substantial and because they aren’t a monthly expense, can sometimes be forgotten and result in unexpected cash outlays that could and should be used on business operations. If you’re not getting the benefits of owning the property, you shouldn’t necessarily be responsible for paying the property taxes.
We’re not saying the landlords that charge property taxes are doing something wrong by any means. What we are saying is, be careful of seemingly cheap office space if there are other hidden costs that may be required.
Hidden Cost of Cheap Office Space #4: Maintenance
The final hidden cost that we sometimes see from cheap office space is maintenance. Are you responsible for cleaning the facilities, fixing things that are broken or need replaced, etc.? If there is snow, are you responsible for shoveling the sidewalks or is that taken care of by the landlord? Are you responsible for mowing the property and caring for the landscaping?
As you probably have experienced, throughout the course of a lease, things will break, go bad, or need repaired. It is critical to know who is responsible for those maintenance items and to budget for those maintenance costs accordingly. Many leases come with an added CAM expense (short for common area maintenance) in addition to the rent rate. Make sure you take into account any maintenance expenses – CAM or otherwise – that you will be responsible for paying.
Now that we’ve discussed some of the top hidden costs of cheap office space, we hope that you have a better understanding of just how much your total monthly investment might be in cheap office space.
If you’re looking for a reasonably-priced office space, check out the spaces available at RISE Commercial District.
