10 Hidden Office Rental Costs For Solopreneurs
Being a solopreneur doesn’t always mean you’ll be able to get work done without the resources of a traditional office. Even if you can get all your work done from home, that kind of lifestyle can make you lonely pretty quickly. Experts point out that not being able to interact with other people on a regular basis can have a negative impact on your overall happiness.
Thus, many solopreneurs choose to rent out office space. It provides them with key resources and gives them a chance to share a building with others. If you’re considering going this route, just keep in mind that there are several hidden office rental costs you should be aware of.
The answer to “how much does office space cost?” can vary depending on a number of factors. To fully understand what you might spend on an office rental, consider these expenses.
The Average Cost of Equipment & Internet in Your Office Space
Many solopreneurs make the choice to rent office space because they need access to fast internet and reliable equipment. Unfortunately, you can’t expect the landlord to provide these amenities at a traditional office like they would in a coworking space. You may need to supply them yourself, which can significantly boost the average cost of office space.
Solopreneurs typically aren’t renting office space for temporary projects. They want to grow their businesses. Thus, they may stay in a space for a relatively long period of time.
This can get expensive due to escalation in office rental cost. It’s not uncommon for office space rent to increase by 3% each year. If you don’t plan ahead for rent escalation when figuring out how much an office space costs, you could end up spending more than you budgeted for.
Geography-Based Office Rental Costs
You may not run the type of business that requires you to be geographically close to any particular industry’s major hubs. Perhaps you can do the vast majority of your work via the internet.
Still, you may find yourself paying more for rent if you happen to live in an area where the average cost of office space is costly. The average cost of office space in Chicago is half the average cost of office space in New York City, for example. You might pay more than you have to simply because your office is in a major city.
This is another reason why shared office space can be a solution. The cost of coworking spaces is often less than the cost of renting an entire office, especially in urban hubs. Plus, amenities are often included in a shared office rental cost.
Price in Utilities When Considering How Much An Office Space Costs
It’s important to read your lease thoroughly when renting office space. Some leases don’t cover basic utilities like electricity. You don’t want to get stuck with an unexpected bill because you assumed the landlord would cover those expenses.
When renting an apartment, a landlord typically requires a tenant to maintain its original condition. The same goes for renting office space. Look for a pre-existing condition clause in any lease you consider signing. When asking yourself “how much does office space cost?” remember to look closely at the rental agreement because you may incur unexpected costs if you make changes prohibited by the lease.
Insurance Adds to the Average Cost of Office Space
Landlords often hide additional office rental costs in commercial leases that tenants would not think to look for. An example would be special insurance for major events like earthquakes. Sometimes, tenants are unaware that they may be required to pay a share of the deductible.
Depending on the nature of your business, you might need to make certain improvements to the space to facilitate your day-to-day tasks. Leases often require tenants to pay for all such improvements on their own. These can substantially increase the average cost of an office space.
Keep in Mind the Average Office Maintenance Costs
Many offices are part of larger office buildings or business parks. In some leases, each tenant is responsible for maintaining “common areas” to some degree. This could mean cleaning the property or maintaining the landscaping. Sometimes, too, this can be an additional monthly cost automatically added to your rent.
Property Taxes on an Office Rental
When you wonder “how much does office space cost,” it’s also important to calculate how much property taxes may contribute to office rental cost. Certain types of office leases require tenants to pay a percentage of the property taxes. Don’t assume this is an expense the landlord will cover on their own.
Landlords typically won’t pay for repairs that aren’t related to the building’s overall functionality. Thus, if you want to make certain cosmetic improvements to your office space, odds are good you’ll have to pay for them yourself on top of the cost of office rental.
All these office rental costs are easy to overlook if you’re a solopreneur. While office space does provide many benefits, renting a traditional office can be much more expensive than you originally predicted. These are good reasons to consider an alternative option.