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Commercial Property Lease Long Lease vs Short Lease

Many people looking into commercial property for the first time can share similar concerns. Choosing the best commercial property lease, long lease vs. short lease, is a common dilemma. This is something that can be quite confusing and it is an important choice because choosing wrongly could have grave implications. The last thing you want is for your business to go belly up after six months and still be left with a forty year lease on a commercial property. You also donít want to get a short lease, establish yourself at a location, and then find out that you canít renew the lease.

Commercial Property Lease Long Lease vs. Short Lease; pros and cons



A short term lease is anything less than ten years while a long term lease is anything more than this. The benefit of a short term lease is that you are not going to be tied into something for too long and this can be especially important if your business needs might change in the near future. Hopefully your business will grow during its first few years and this might mean that you need bigger premises. If you are stuck in a long term lease it might be difficult for you to get out of the lease without paying a huge penalty. Another benefit of the short term lease is that it is less of a risk financially; losing your business near the beginning of a long lease can be disastrous. As mentioned above the main drawback is with a short term lease is that you might not be able to renew it if you want to stay longer.

The benefit of having a long term lease is that it probably works out cheaper than a short term lease and it allows you time to establish yourself in one location. You donít have to worry about the landlord refusing to renew the lease when you go to renew it every few years. You have committed to the property for a long time.

Commercial Property Lease Long Lease vs. Short Lease; making the choice



This is a decision that each business will need to make after considering their unique circumstances. If you are just starting out in business though, it may be advisable to stick to a short-term lease. It is possible to lower the risk of a long-term lease by insisting on a Ďget out earlyí clause in the lease contract or be getting commercial lease insurance. Having either of these could mean that you donít end up with huge debt if things go wrong for your business.

Leasing commercial property is not something you should just rush into. If you are a well established business with plenty of spare financial capital it might be better to buy a property. If you are a new business and feel uncertain about the future then you might be better off just renting a property; at least in the short term anyway. If you are still unsure then it might be best to seek some advice.


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