12 Common Office Leasing Mistakes You Should Avoid

Renting office space is an exciting time for your business, but it’s also one of the biggest decisions you’ll have to make. After payroll, it’s likely to be your largest expense. You owe it to yourself to be as educated as possible to avoid a bad deal.

If this is your first time renting office space, you’re bound to make some type of error. That’s part of the learning process. But it’s best to insulate yourself from costly mistakes as much as possible so you don’t handicap your company’s growth.

Below you’ll find the most common mistakes businesses make when they rent office space and how you can avoid them.

Is this your first time renting office space? Download our free guide that explains the process step by step.

1. Rushing in Without a Plan

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Before you make the jump to your own office you need to have a plan. Sit down with your key employees and figure out what your business needs in terms of office space. Ask yourself some questions.

  • How much room do you need?
  • What amenities do you need?
  • Do you require a specific layout (like open space or separate offices)?
  • Does it need to accommodate clients, customers or equipment?
  • Will you be bringing in your own furniture or do you require furnishings?
  • Do you know what you can afford to spend?
  • Which areas do you prefer?
  • Does parking or security matter?

Companies who rush through the process and don’t take the time to consider their needs objectively regret it later on.

2. Failing to Read the Rental Agreement

It’s amazing how many people don’t read the things they sign. They usually figure they don’t need to because they’ve already spoken with the landlord/property manager/realtor. Sometimes they assume they don’t wouldn’t understand the terms anyway.

“While a lease allows tenants to stake their claim on a particular space, it can also end up trapping them in an environment that doesn’t live up to expectations,” says Ron Bockstahler of Amata Office Solutions, a real estate provider of massive corporate offices. It’s important to read the lease so you don’t get trapped in something unsuitable. If something is incorrect, you could be obligated to honor what you signed.

We recommend turnkey office spaces to our clients because they come with short, easy to understand agreements without hundreds of clauses.

3. Renting an Unseen Unit

Busy people are often tempted to agree to rent a unit without seeing it first. This is always a mistake. Even if you are given pictures, you can’t be sure what you’re renting until you actually stand in the space.

Clever photography and well-crafted ad copy can be deceiving and won’t give you an idea of the area or any odors or noise. Plus, can you visualize what 1000, 1500 or 2000 square feet of space looks like?

If a property owner isn’t willing to let you into a unit before signing an agreement or taking some money, the opportunity is most definitely a scam. Immediately stop speaking to the scammer.

4. Not Consulting Your Employees

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It’s best to have a discussion with your employees before you rent a particular space. Find out if anyone has any problems with the unit, the commute, the parking, or the neighborhood. You can’t please everyone, but it’s smart to ask their opinions in case there’s a problem you didn’t foresee.

5. Not Documenting the Unit’s Condition

At the end of your lease, you’ll be billed for any damages or alterations you caused. Sometimes tenants get accidentally charged for things that were already there.

It’s a smart idea to take photos or video of the unit during your walkthrough or just before you sign your agreement. Even if the landlord has photos, there’s no telling if they’re accurate or unaltered, so obtain your own. Look for dents or chips in the wall, carpet stains, window cracks, or anything that doesn’t work properly.

Send your photos to the landlord immediately so you have dated communication. Explain that you don’t mind the imperfections, but you’re speaking up so you don’t get charged at the end of the term.

6. Forgetting Renters Insurance

The owner of the building will have insurance on the property, but not your belongings. If you have any property or equipment you wouldn’t want to lose (like computers or electronic devices), I strongly recommend buying renters insurance. It only costs a few hundred dollars for the year, yet (shockingly) only 37% of renters buy it, according to the Insurance Information Institute.

7. Only Viewing One Property

If you rent the first property you see, you’re setting yourself up for a bad experience. This is especially true if you’ve never rented office space before. You need to see multiple units to get a grasp of what you like and don’t like. For instance, you may not know you want lots of natural light until you see a unit with big windows.

Furthermore, viewing multiple properties gives you leverage with the property owners. You get to say something like “I’m seeing five spaces today. I’ll let you know what I decide.” Language like that tells the property owner that he has to compete with other units.

8. Failing to Benchmark Similar Properties

Before you buy anything, you should make sure you’re paying a fair price. Office space is no exception.

The best way to do this is to arrange appointments to view multiple properties and spend a few minutes glancing through ads. Compare units with similar square footage and amenities to the one you like. Is the price reasonable? Does it feel like a value?

9. Failing to Negotiate

Just because you’re renting a small unit with a simple lease doesn’t mean you can’t negotiate. In fact, property owners expect it. In the case of a turnkey space, you be able to negotiate alterations to the space, but you can haggle over your overall rent and which amenities you have access to (like common areas and shared receptionists).

10. Falling in Love

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Sometimes a renter will fall in love with a particular location. They’ll love the lighting, the layout, the furniture (if provided), or maybe the neighborhood. It’s good to enjoy your space, but make sure it serves your business’ purposes. Is it worth cramming into a small room just to have a coffee shop nearby? Are you willing to spend extra to be right on the main road?

“You have to go into negotiations knowing that if you don’t get a fair deal, you can move on and your business will thrive elsewhere,” says serial entrepreneur Melody Stevens. Don’t let your emotions cloud your judgement.

11. Miscalculating Growth

When you rent space, it’s important to consider your company’s future size. How many people will you have? Will you be buying new equipment that requires spaces? Will the growth be steady and predictable, or sudden and urgent?

If you miscalculate growth, you might end up in a space that’s too small for your company, or a space that’s too large and waste of money. Take some time to figure out what your company will look like by the end of the rental term.

Career and Workplace Expert Heather R. Huhman recommends anticipating product launches, expansions, employee turnover, industry changes, new business investment, and your goals.

12. Being Picky with Location

Yes, it’s important to find a great location, but there are probably lots of suitable areas within a reasonable commuting distance. Instead of limiting your search to an area you like, figure out what you like about it. You may like the closeness to public transportation or the nearby healthy lunch options. Measure new areas against your requirements.

Don’t begin the rental process without an idea of how it works. Subscribe to receive our free step by step guide on renting office space.

As you view properties and move through the renting process, keep these mistakes at the forefront of your mind. If you can avoid making common errors, you’ll land a quality unit that supports your business’ growth without cumbersome expenses and hassles.