When it comes to renting a piece of commercial property, the monthly or quarterly payment is one of the main costs that you will need to consider. For this reason, it is vital that you include the rent in your budget to ensure that you will not be scrambling for extra cash at the end of every month. Enumerated below are a few tips that can help you survive in your search for the best commercial space in the UK.
Paying Your Landlord
Oftentimes, landlords will request that you pay an advance as well as a deposit after you finalize your contract. Smaller or younger businesses in particular will be asked to provide a guarantee that they are capable of paying for their rent. Although the tradition in the UK is to pay for their rent on a quarterly basis, namely every 24th or 25th of the month, most landlords now accept payments on a monthly basis. If you have any pending insurance bills and utility bills, these will likely be included in the rent.
If your chosen commercial property requires a lease, you will need to consider this as a crucial part of your allotted budget. This is particularly true if your lease will be applicable for more than three or four years. After all, the lease prices can fluctuate based on the market and it can either go up or down within the agreed rental timeframe. Though it might seem like a considerable amount of work in the beginning, you will find that conducting prior research on the rental forecasts and past and future trends will save you a lot of money in the long run. You can also consider hiring a commercial real estate agent if you are running on a tight schedule.
Factoring in Business Rates
Unfortunately, unlike the owners of residential properties, commercial and non-residential owners will need to pay additional business rates in the UK. These rates are applicable for establishments such as factories, offices, warehouses, shops, restaurants, cafes, and pubs. The renters or tenants of the said establishments will be responsible for covering the additional expense. Typically, the business rates add around 40% to the overall monthly rent of your commercial space. However, if you want to get a more accurate amount, you can simply calculate the possible business rates using either the market value of your property or its level of the uniform business rate or UBR. It should also be noted that business rates usually change every five years depending on market fluctuations.
Aside from the main rental costs, you will also need to pay for the service charges or maintenance of your property. If you will request for any repairs or renovation to the space before you move in, your landlord might need you to cover those cost as well. Keep in mind that any property insurance costs will also likely be split between you and your landlord. Since you will need to keep lights, air conditioners, freezers, and other appliances turned on during most of the day, you should also factor in the energy costs to your budget. Fortunately though, most commercial properties in the UK are quite energy efficient. In fact, your landlord is required to supply you with an Energy Performance Certificate to prove how well the property performs.