5 Factors That Impact Office Space Rental Rates For Small Businesses  

There are several factors that impact office space rental rates for small businesses. Most companies invest in office spaces to increase overall productivity and to maximize business growth. Purchase an office space that fits any business type and customize it with office decorating ideas such as special features, styles, or amenities. This way, you can decorate your office on a budget. As a small business owner, consider a space that will help your company thrive and increase profits while not making you bankrupt. Here are the factors that can impact your office space rental rates.

Lease Percentage

First, your lease percentage can impact your rental rate. Typically, landlords determine the base pay for their commercial lease calculations. Then, along with the base pay, you would pay a percentage of your retail gross income. Consider calculating your rate through percentage over base amount. Here, you pay a minimum monthly base rate plus a percentage of all your gross receipts over a specific base amount. For example, the base rent could be $1,000 a month, plus 5% of all your gross receipts over the amount of $50,000 a month. Or, you could pay a percentage of your gross receipts. Rent would be paid on every gross receipts from zero. So, you could be paying $500 a month as a base plus 2% of your total gross business receipts. Certainly, the lease percentage can affect your office rental rate.

Square Footage

Secondly, square footage can affect your office space rental rate. Your payment per month can be based on your square footage requirements. Find an office space that can fit all your employees comfortably. Depending on your business type, you should have anywhere between 75 and 200 square feet per employee. Additionally, remember to include enough space for amenities such as mobile paper shredding options, printers and filing cabinets. Calculate your monthly rate by discovering the amount of square footage needed and how much each square foot costs. Then, multiply your needed amount by the cost per square foot. Of course, you can also determine your yearly costs by multiplying that number by 12. Certainly, square footage can impact your office space rental rate.

Location

Additionally, location can influence your office space rental rate. Different states require different commercial rent costs per square foot. For example, office spaces in popular cities like San Francisco or New York have a higher average rate per square foot. San Francisco averages about $92 per square foot while New York averages about $85. Or, you can rent in cities like Houston or Atlanta. Houston and Atlanta costs less than half of the other popular cities, averaging about $30 to $31 per square foot. Of course, review your funds before choosing a location for your office space rental. Location can strongly influence your rental rate. 

Utilities

Next, your office space rental rate can be affected by utilities. Typically, commercial landlords don’t pay for utilities. So, you may encounter extra fees for water, gas and electricity. In fact, you might have to pay fees for telephones and sewerage as well. Commercial buildings, on average, charge about $2 per square foot for utilities. As a result, for a space of about 700 square feet, you could be paying anywhere from $200 to $1150 a month. To calculate your total monthly costs, you would need to add your utility prices to your rent amount. Of course, you may also want to set aside some funds for utility repair if there are any damages or problems. Certainly, utilities will influence your office space rental rate. 

Additional Amenities

Finally, additional amenities will impact your rental rates. Typically, buildings with extra facilities and amenities charge more for rent. Of course, you should receive high-speed internet and work stations such as desks or tables without an extra charge. But there are other amenities that can hike your rates. For example, you may have to pay extra for a private kitchen, a lounge area and a commercial office coffee machine within your facility. Or, if you need parking amenities, you could end up paying for parking permits every month. More so, you may even have to hire janitorial services since not all spaces offer those amenities. Surely, additional amenities can influence your rental rates.

There are various factors that could affect your office space rental rates. First, the lease percentage impacts your rate by adding a percentage based on gross receipts to your base pay. Secondly, depending on the required square footage, you can calculate how it can affect your rental rate. Next, location strongly influences your rate as some cities average about $90 per square footage while others average less than $30. Of course, utilities will affect your rate since landlords usually don’t pay for utilities. Finally, additional amenities such as vending machines, parking and lounge areas can influence your rent rate. These are the factors that could impact your office space rental rate as a small business.