“Starting Your Own Office Space Rental Business” written by Mike Marko
Is it worth considering owning your own office space rental business?
If you are looking to generate a steady flow of passive income, then an office space rental business will do just the trick. Many business owners consider a rental business to be the ideal investment given the solid ROI it provides.
Unlike residential rental properties that can experience long periods of vacancy, office spaces tend to be snatched up fast. There is no end to businesses who are looking for a place to settle in and are usually willing to shell out more money for the right location.
However, before you can start your own office space rental, there are certain things that must be considered.
In this article, we’ll discuss the different factors to consider when starting your own office space rental to make it a success.
Make Money with Office Space Rental
Starting your own office space rental is a great way to generate a reliable source of income. This investment becomes a more attractive option for passive income given the volatility of the stock market.
At a time when more and more people are realizing their entrepreneurship dreams, office spaces are more in demand than ever before. Building their own space proves to be an unnecessary and expensive endeavor, which makes renting the better choice for them.
This opens a window of opportunity for you to provide space for their daily business operations to take place, while supplementing your savings.
Things to Consider in Renting out Your Space
Renting out office spaces has become increasingly popular among budding and even established entrepreneurs. The reliable amount of demand for it means you will never have to spend sleepless nights about long periods of vacancy.
There are different factors that contribute to the overall success of your business. To give you a place to start, here are the things to consider when starting your rental business.
Check out the Prices
Determine the price of your space. Compare it with office spaces for rent around the area. Remember that the idea is to remain competitive with the prices offered by your competitor.
If your office space is located strategically with a lot of foot traffic, then you can justify an increase in the price of your space.
Your space also becomes even more valuable if it offers private meeting rooms, facilities, parking spaces, and equipment.
Offer a Rolling Monthly Agreement
Small businesses would rather settle on short leases. Not everyone can afford to take part in a financial gamble.
As this, you may want to offer a rolling monthly agreement. This way, you’re likely to attract more and you’re not bound to a long-term contract. This flexibility is attractive to businesses given the unpredictability of the market.
Showing the Space
All too often, many property managers use their space as storage. Before showing your space to prospective tenants, make it particularly attractive so you can pull in tenants quickly and charge them an extra.
Make sure that you have someone, if not you, to promptly respond to queries of potential commercial tenants either via email or phone calls.
Schedule a time for the renters to come look at your office space.
Screen the Potential Renters
Make sure to have your potential renters fill out an application form with the following:
- Personal information
- Social security number
- Business information
References are important so you can check what kind of business person your client is. You may want to inquire prior property managers if they do pay on time are capable of taking good care of properties.
You can also run a credit check to help you in weeding out bad tenants. While it is important to secure tenants for your office space, it is not worth the headaches of dealing with payment or maintenance issues.
Draft a Lease Agreement
Lease agreements serve not just as a communication tool, but also a reference of what everyone has agreed to. A lease agreement explains the key terms of the agreement.
Drafting a lease agreement serves as your protection. Make sure it contains vital information such as:
- Length of the lease
- Options for renewal
- Amount of rent
- Security deposits
Secure Their Payments
It’s legal to ask for deposits from your tenants. State laws allow this to protect your business in case the renter skips out on rent during the tenancy.
Aside from using deposits for unpaid rent, it can also be used to cover the damages to the property.
Make sure to set a deposit you think will be reasonable enough. Check state laws for specification regarding security deposits to avoid any legal issues along the way.
Consider the Welfare of Your Clients
If you consider the welfare of your clients, your business will surely thrive. Serve to make their lives easier.
You may want to partner with someone who’s into office equipment rental and offer it to your tenant. If you have office equipment which are readily available, you can lease them to your tenant.
Aside from that, you should consider other things to ensure smooth business transactions with your tenants. These include but are not limited to:
- A quiet and conducive work space
- Access to internet
- Cleaning staff
- Constant electricity and water supply
- A generator in case of power outages
Be a Good Property Manager
Charge your tenants a fair rate. After all, they might become your clients for a long-term. If you’re a good property manager, you’ll be recommended by your previous tenants.
Marketing Your Office Space for Rent
Now you know the things to consider in starting your own office space rental business. The next step is, to plan on how you’re going to market your office space.
Marketing your office space can be a very stressful task, but it doesn’t have to be. Just use the extensive variety of industries around you to market your office.
Commercial tenants won’t know about your office space rental if you don’t advertise it!
Make use of social media platforms to advertise your office space. Examples include Facebook, Twitter, and LinkedIn.
There are also several websites that you can use to reach your potential clients. After all, online advertising is so much popular these days.
One example is Craigslist and another is Sharedesk. They streamline the process and can help you save some time.
Not all discovery happens online. You can also advertise on your city’s “Office and Commercial” board or run a classified ad with your local newspaper. It is also worth taking part of events happening around the area created specifically for entrepreneurs.
Final Thoughts on Starting Your Own Office Space Rental Business
Investing in commercial real properties allows you to generate passive income that can be used to supplement your savings and active income. In this article, we discussed the different considerations that must be taken into factor when starting your own office space rental business to help guarantee its success.
The most crucial point to settle and significantly impacts your business is the rental price. Ensure that it is competitive enough against your competitors without decreasing its value.
Consider offering leases that are flexible and does not always require long-term tenancy given the unpredictability of businesses.
But while it is good to have tenants, it’s even more important to have quality tenants. Save yourself the headaches by only taking in tenants that have a history of paying on time and maintaining properties.
Secure safety deposit to protect yourself financially and consider the welfare of your clients in everything you do. Most importantly, do not forget to market your office space for rent. Make use of the advertising websites and different social media platforms.
If you have questions about office space rental, leave them in the comment section below.
If you need help marketing your business online then check out IM Consultant Services.
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