Before You Sign: 5 Things to Check Before Making Leasehold Improvements
Before you sign that lease, however, make sure you check these 5 things before making leasehold improvements.
Although buying a property for your business might be ideal, it isn’t always possible or practical. And when you need to do some renovations on a property to set it up for your business, leasing your building space might be the most cost-effective option. Here are a few questions to ask before you sign on the dotted line.
1. How Much Renovation will the Landlord Allow?
Simply clarifying that your landlord will allow you to make renovations to the building isn’t enough. His idea of ‘renovation’ may be completely different from yours. Discuss exactly what you plan to do, from new flooring to equipment installation to the public bathroom you plan to add. That way, there won’t be any surprises later on.
2. How Will You Finance the Work?
If you’re planning on getting a bank loan, you will need to talk to your loan specialist to make absolutely sure that you aren’t stuck with a two-year lease and no money for remodel. Your landlord may be able to offset some of the cost of the renovation, especially if it will raise the value of the property. This is also a good time to finalize as efficient a budget as possible, and make sure that your loan gives you plenty of wiggle room in case things run over budget (as they often do).
3. What Belongs to You, and What Belongs to the Landlord?
Generally, anything that can easily be moved, such as furniture or computers, is your property. Anything large, heavy, and built-in belongs to your landlord. If you want to take any of those built-in things with you when you leave the building one day, such as business equipment, shelving, desks, or the like, make sure you discuss this with your landlord as well. Keep in mind, this could affect his motivation to help you pay for the renovation, or offer a few months of free rent in exchange for raising the value of his property.
4. Will You Need to Do More Work in the Future?
Your landlord might accept that you need to have some work done to the property to get it ready for business now, but he might not be so keen if you decide you want to change things around again in the future. You don’t have to finalize any plans for future remodeling yet, but you may want to go ahead and find out if it will be a possibility. If you want to keep your options open, you might consider looking for another property if the landlord of this one is none too eager about future construction on his commercial space.
5. Who will Do the Work?
Hiring an experienced contractor for your remodel is of the utmost importance. Pick out a contractor who has experience remodeling commercial buildings in your industry, great references from other business owners in the area, and a strong portfolio of custom work. The best contractors will also have an excellent network of professionals, and can recommend architects, real estate agents, and just about anyone else you might need for your project.
Antham Construction is one of the leading contractors in the southern Ontario area. With the skill and experience of fourteen years of designing and building commercial spaces, we have built a reputation for our unbeatable service as well. Contact us today to talk about your business remodel — before you sign the lease.