8 Steps for Renting Your Extra Business Space
If you’ve got extra office, warehouse, parking or other business space you’re not using, you might be able to get others to pay for it.
Take time to do a little research and you might find you can decrease your expenses and increase your income by leasing your extra office space to others who are happy to have it.
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Evaluate your extra office space
Take a look at the space you have available that you want to lease or rent to others and ask yourself the following questions:
- What’s the square footage?
- Does it have easy access for the client while not interfering with your employees or customers?
- Are there extra operating costs if it’s occupied (e.g., utilities)?
- Does it need to be prepared for rent (e.g. Does it need new carpet or paint?), and is there a cost?
- Will it need furniture?
- How many tenants might use/occupy this space?
- What can it be used for (e.g., storage, office space)?
- Can you offer extra amenities to the tenant (e.g., copier, kitchen, conference room)?
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Check your legal limitations
If you have a landlord, you might not be allowed to sublet your office space. Check your contract to see if you can.
If you find out you can sublet, check local laws about tenant rights, landlord rules, safety, inspections, parking regulations, etc.
Call your insurer to inquire about any extra insurance you’ll need or liability waivers a tenant, renter or lessor will need to sign.
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Evaluate your risks
Decide what risks might occur if you rent out your office, warehouse or parking space. These might include theft, injury, property loss, assault, etc. Your insurer can help you with these.
Talk to your employees about whether or not a tenant using your empty offices, copier, bathroom or other assets might cause any hiccups in your operations.
Be careful about letting tenants use your internet connection and phone system. This might cause security issues, slow down your connection speed, expose you to a virus or confuse customers.
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Estimate your costs
Determine what it will cost you to rent the space, including making any upgrades, using more utilities, adding furniture, conducting reference or background checks, etc.
If you don’t want tenants using your internet or phone connections, find out what it will cost to add independent lines to your office.
Have an open office? Consider adding cubicles for your tenants’ privacy.
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Identify your likely target renters
Create a list of possible clients based on what you have to offer. Many entrepreneurs will be eager for an office where they can meet clients and have access to a conference room. Others will want storage space that’s climate-controlled and provides security.
Some people will want flexible, short-term or month-to-month leases, while others might want more stability. If you’re already in a building with businesses on other floors, you might be able to rent conference room space by the hour.
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Set your lease rules
Write a list of rules for tenants. For example, you might limit their access to the space during your working hours. This means you will not have to give them a key or pass. Your tenants will need to know that if you have to shut down your business for some reason (e.g., illness or out-of-town meeting), they could not access the building. Try to plan ahead for this by reviewing any shutdowns that occurred during the past year or two.
They might need building IDs, like your employees. You might prohibit the use of audio devices. You can set limits as to the number of times or hours per week they can use the conference room. Tell potential office space tenants what your company guidelines are and that tenants must follow them.
Set your rent/lease payment dates, late fees, returned check policy and other payment-related rules, including how you’ll accept payments.
Make sure none of your rules violate state or federal tenants’ rights ordinances or landlord rules.
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Set your rent
Once you know what your costs will be to lease your extra space and who might want it, research the marketplace. Find out what your target customer will have to pay at a similar commercial building.
Determine your cost per square footage or total monthly rent for your space, taking into account your costs to prepare the space, market it, operate it and taxes. This will help you compare yourself to other landlords.
Set your rent a bit higher than you need to so that you can see what the market will bear. If you don’t get any bites, lower it until you get some takers.
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Advertise your space
Put your space on the market via your social media accounts and our website (www.ulend.me). Ask your employees to let their friends know your company has space. Look for chat rooms and forums where your target customers congregate and let them know you have space available. Tell your vendors and suppliers to share your information with their clients who might need space.