In the current economic climate and ideally at any time during the economic cycle, cost mitigation is and should be a key concern for businesses. Property occupancy costs account for a large portion of expenditure and minimising these costs should be high on any companyís financial control agenda.
All the costs associated to your property should be under constant scrutiny to keep expenditure to a minimum and ensure best value is achieved.
Below are tips on how to achieve this, with the help from Trevor Dawson Commercial Property Consultants of course:
1. Make sure you get the best deal from the start
The lease you sign sets the tone for your lease term, so it is essential it represents the best deal for you in terms of lower rent, favourable rent review provision and/or better incentives. Take proper advice to ensure you get the best possible deal from the outset.
2. Donít occupy more space than you need
Consider subletting any surplus space, if your lease allows. It is something worth investigating as you will only incur costs on the space you occupy, not the space you originally signed up to.
3. Donít pay more rent than you have to
Ill-advised tenants can fall foul of a proactive landlord at rent review and lease renewal. It is essential you take proper advice from an advisor with the relevant market knowledge to ensure you pay the minimum rent.
4. Know your property valuation
Can you buy your property and cover the mortgage costs for less than you currently pay in rent? If you have long term lease commitments, buying your property can lower your property costs considerably and you may even pick up a bargain which could be sold on later at a profit.
5. Understand your landlordís agenda
Does your landlord want income now or security going forward? Explore options to re-gear your lease in return for an incentive from the landlord such as a rent free period, cash incentive or even a reduced contractual rent.
6. Is your rateable value correct?
Just because business rates are based on a rateable value set by the Governmentís Valuation Office Agency, it does not mean it is correct. The rateable value can be challenged.
7. Maintain your property in good repair
Ensuring your propertyís condition is maintained mitigates the chances of the landlord serving an interim Schedule of Dilapidations or Repairs Notice during your occupation, which can be very costly. Having a Planned Maintenance Schedule can ensure you spend the minimum required to maintain your property in the condition required under the terms of your lease.
8. Understand your service charge
Ensure you pay only what is essential under your lease as service charges can be very costly and may not represent best value.