Your lease term is among the most important decisions you will need to make in negotiations for a commercial real estate lease. You can achieve the best results during the lease negotiation by consulting with commercial real estate Corpus Christi. Leasing on a short-term or long-term basis has its advantages and disadvantages.
Let's take a look at the pros and cons of both solutions, and decide which is best for your company.
What is a lease?
A lease is a document that specifies the terms and conditions of occupying a rental property signed by the landlord and tenant. Whether renting an apartment with a roommate or renting a house by yourself, you must sign the lease. There are long-term and short-term leases.
Short term leases
Pros
Having the freedom to grow
If your business grows rapidly in the near future, you'll be able to look for a larger space if you contracted for a short-term lease. Consequently, unused square footage can be eliminated from your cost to future-proof your business.
Strategies for overcoming challenges
Short-term leases don't allow you to predict exactly where your business will be in the next few years. And this makes your moving process more complicated and makes it more difficult to predict costs.
Cons
Providing peace of mind to start-ups
If you decide and want to begin your start-up in a cheerful piece of mind, but the future of a new company is always undetermined. If you don't experience the success you were hoping for, a short-term lease will not bind you to an office.
Costs are higher
If, in this case, you are not interested in a long-term lease, you will likely face a greater rental rate. Furthermore, if you don't agree to extend the lease, you will have less leverage when it comes to negotiating clauses and terms.
There is a lack of stability
While short-term leases give you a great deal of flexibility, they can be a hassle as well. Every time your lease agreement expires, you will have to pack and unpack, search for an apartment, and go through the apartment inspection process.
Long-term leases
Pros
A competitive edge at the negotiating table
The goal of landlords is to retain tenants for as long as possible in order to avoid the hassle of renegotiating new contracts. As long as you arrive at the table with the intention of signing a long-term lease, the landlord is more flexible on the price and other terms to secure your signature.
Costs are predictable
With a long-term lease, you will know your costs for a specific period of time, which makes budgeting easy.
Providing adequate security
When you lease for a long time, you can be certain that you won't need to relocate quickly if the building is sold. The advantage of maintaining a continuous presence in one place is that you can attract clients.
Cons
Identifying future needs
It's critically important to spend time carefully analyzing your future needs if you plan to sign a long-term lease. As a result, you will want to make sure you will have sufficient space to meet your company's requirements throughout your lease. However, making predictions about the future can be tricky, and it adds an additional level of work to the process.
Changing needs can cause hassles
Having sublease and assignment rights in your lease can reduce some of these troubles. But you will still have the difficult task of finding a company to presume all of part of your space if in case your needs change.
Final verdict
One lease is not better than the other. Commercial real estate Corpus Christi helps you choose based on your lifestyle and living situation. Think about the pros and cons of short term lease and a long-term lease before signing on the dotted line.
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