As your business grows, or maybe according to your type of business’s needs, you might find yourself in need to find a much larger space for operations. Industrial rental space will be your best option if you need some flexibility on location, or if you need the space for an undetermined period of time.
To know if renting an industrial space is the best option for you it is necessary to consider some characteristics of your business.
If your business is growing and you don’t have enough space to keep your products in your previous space, your most desirable option might be to rent warehouse space. Why renting instead of buying? If you are just getting started with industrial rental space, and you are still not quite sure about how much space you will need according to your business size, renting will be your best option.
Depending on your company’s revenue, rental space will be a better option than buying. Small businesses and newer companies might not have a lot of money that they can spend on warehouse space and should consider renting instead of buying. If your company is still growing, and your revenue is also increasing, you might consider more affordable options such as leasing. Shared warehousing provides multiple businesses with storage space inside the same building at a cheaper price than buying.
There are different types of leases you can choose from. The most common type is a net lease, which is a type of lease where the tenants are in charge of paying insurance premiums, maintenance costs, and property taxes on top of their rent. This may sound very expensive at first, but with renting instead of buying industrial space, you possibly avoid having to pay a very expensive down payment.
Inside of net leases we find three other kinds, which are single net lease, double net lease, and triple net lease. Considering some things about your business, such as how much money you can spend on industrial rental space, how much space you actually need, and how long you need it for, you can find which type of lease works better for you.
A single net lease is a type of lease where the landlord, instead of the tenant, is responsible to pay the property taxes. The tenant is still responsible for covering the expenses for maintenance and premiums. On double a net lease, the landlord takes over property taxes, and one more of the three property expenses, which can be utilities or insurance. Lastly, a triple net lease would be the preferred type of lease for a tenant. The landlord agrees to pay for property taxes, premiums, and maintenance costs.
Renting or purchasing?
Industrial rental space will be the most adequate option if you have a small business that does not have an established and consistent supply chain. As we previously stated, one of the advantages of leasing is not having to deal with an expensive down payment. You might still have to pay a security deposit, but that would not be as risky as putting a large sum of money down. Renting, just as everything else, also has its downside. There can be a sudden increase in rent and you also don’t have the freedom to make changes in the property itself.
Purchasing is a good idea if you are thinking about saving money in the long run and maybe even renting the space to other companies in the future. On top of that, you will be able to make changes to the property as you desire. You should carefully consider where your company stands and what option would be your best fit.
Are You Looking for Industrial Space to Rent?
At Schwarz Properties a group of experienced professionals will guide you to find the right industrial property for you to rent. Schwarz Properties specializes in property management including residential, retail, and office space in Virginia, South Carolina, and North Carolina. You can contact us at our website or by calling 336-485-4584 today!