Should You Sublease Office Space?

If you are leasing office space and are not using all of the area you are renting, you may be asking yourself what is subleasing, how does it work, and is it worth it?

Reasons to Explore How Does Subleasing Work

In a sublease agreement, subtenants pay rent directly to the sublessor, who pays the entire amount of the rent to the landlord. A primary reason for businesses to explore the options for subleasing rented office space revolves around not wishing to break a current lease, which would lead to additional costs and fees.

Some common reasons to sublease your office space include:

Unused Space

If you have downsized your company and are not using all of the office space that was initially leased but still paying to lease it, subleasing all or part of the area will help to offset lease payments and bring in extra revenue.

Room for Growth

When leasing office space, it is smart to anticipate growth in your company’s success that will lead to the need for more space. Short-term renters can make good use of extra space you are not using at the moment and help you with operational costs until space is needed.

Office Move

If you need to move out of the current space for whatever reason, subleasing the space until the end of the lease’s term will keep you from paying for space you are not using, and prevent you from having to break the lease.

What is Subleasing and What Are the Steps to Take?

It may sound like a good idea for your specific circumstances, leaving you asking the question, how does subleasing work? The following are steps and considerations for those who are exploring what is subleasing:

Lease Restrictions

Before making any moves towards subleasing your office space, make sure it is allowed under the terms of your lease. Even if your lease allows for subleasing, there may be restrictions and conditions along with it.

Carefully Screen Prospective Applicants

Subleasing office space is a great way to outsource the areas of the rental space you are not using, but subleasing to the wrong people can cause more problems than it solves. Verify you are not subleasing your space to a competing company in the same industry.

Regardless of any agreement you strike with a subtenant you are still fully responsible for the entire amount of the rent each month. Performing due diligence to ensure your leaser has the means to pay you every month will avoid future hassles and expenses.

Leasing Price, Terms

One of the biggest factors when determining how much to charge for subleasing your rental property is that some leases do not allow you to set prices that will make you a profit instead of merely helping to cover the monthly lease payments. Deposits to safeguard against damage are usually around the cost of one’s rent. You will also need to decide what if any utilities or other operational costs are included in the sublease agreement.

Get Started at MyEListing.com

Whether you are determining the differences between sublease vs. sublet while figuring out exactly what is subleasing and is it best for you, or are looking to buy or rent an office space, log onto MyELisiting.com today to search for commercial properties for sale and rentals of all kinds.

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