Short Term Vs Long Term Commercial Lease: Finding The Right Fit For Your Business

When you sign a commercial lease agreement, it’s time for you to enter into a legal contract. Naturally, you need to consider an expert’s advice to ensure that the starting point is free from hassles. However, one of the most pressing concerns that you may face when leasing a commercial property is whether you should pick a short or long-term lease agreement.

Usually, there are no limitations for availing a commercial lease in Kelowna and Fraser Valley. However, one must explore both options carefully to make the right decision.

What is a short and long-term commercial leasing contract?

For short-term rentals, the investors will have their authority on the property for twenty-eight days and will have a definite payment structure. On the other hand, long-term commercial leases begin from one to six months and may become extended if the tenant prefers.

Reasons to consider short-term commercial lease

If you are considering availing a commercial space for lease in Kelowna and Fraser Valley, you need to focus on the differences between short and long-term leases. Finding the right option of leasing for your business may involve several challenges and pitfalls may hamper the potential growth of your business. Here is an explanation of a short-term commercial lease:

• Reduce the risks and commitments

Short-term leases are a perfect choice for start-up businesses as they may lack the resources to enter a long-term deal. With a short-term lease, you will reduce financial risks, allowing them to experiment with various options in the beginning. If you are a business trying to venture into other endeavours, entering a short-term lease will help you reduce the risk of commitments.

• Enjoy greater flexibility

For start-ups, the aim is to grow quickly. However, it won’t be easy to expand unless you have the space, coverage of services, and workforce based on your financial conditions. That is why businesses prefer enjoying flexibility at this stage to cater to their growing needs at this stage.

If your business needs to expand the space at an early stage, it is relatively easier to switch to the best location with a short-term lease clause and preserve your funds for a better reason.  For businesses not doing well and planning to close operations, a short-term lease may offer freedom from rent expenses. If you are a small business considering commercial leasing in Kelowna, a short-term leasing option

Cons of short-term lease

• Less security

Undoubtedly, landlords prefer long-term leases to short-term leases as the former helps them build the cash flow over a period. With that said, leasing for the short term may make you feel less secure and evoke fears of eviction when you fail to pay the leasing amount. Would you want to let go of the business space when your company is just about to see some deposits in revenue? If you are serious about expanding your business, don’t let the uncertainty of a short-term lease affect your long-term plan.

• Not cost-effective

It’s true indeed. Short-term leasing costs are higher than long-term leasing as the landlords do not feel secure enough when it comes to the cash flow, making them charge higher interest rates.

• Face financial risks

The short-term rental rates are market-dependent, so you may not know what amount to pay for rent. Not knowing the rent amount may not allow you to follow a definite financial plan.

• Fewer opportunities for negotiation

You must be aware of landlords’ preference for long-term leases compared to the shorter ones. That is why short-term commercial tenants have little or no scope for negotiation during commercial leasing.

Benefits of a long-term lease

Almost every business owner is familiar that landlords prefer long-term agreements when offering a commercial space for rent in Kelowna and Fraser Valley. However, there are more causes you need to explore:

• Low-cost and easy-to-locate

One of the major reasons to get a commercial space for long-term rent is that it helps you avert fluctuations in rental rates by paying a definite amount of rent for a long time.

• Prevent the unpredictability of payments

When it comes to commercial leasing in Kelowna and Fraser Valley, going long-term, will help you prevent unpredictability as you can anticipate the rental costs in advance. That way, you can also plan your finances effortlessly.

• Improve the opportunity for negotiations

During a long-term commercial leasing opportunity, you will enjoy more power in negotiating the terms and maintaining a good relationship during the entire tenure.

Cons of long-term commercial leasing

Well, long-term leasing has its cons as well and the most prominent one is that such an agreement continues for a long time. So, if you make plans to move your business to a better location, you may still have the bindings of the agreement. You need to examine the financial risks and take into account the impact of leasing before choosing the right option.

Moreover, if the leasing terms prevent you from expanding and the space you get is not viable for such an opportunity, you may need to find a bigger space, incurring losses toward the rent. Try consulting the best realtor in Kelowna and Fraser Valley to find out how good are the commercial rental prospects for the tenants in Kelowna. Emil Anderson Properties has been a leading property developer and is an expert in commercial leasing.

Are you planning to a new location from your old office premises or is it your first business venture? Give yourself adequate time to avoid delays and choose the leasing option free from hassles.