Office Space Renting...pros? cons?

[TurboGizzmo]

Getting Input:

So i have a opportunity to rent some office space thats within walking distance from my house. The logic in my mind is that for the first couple months/year it would be more as a advertising benefit since it has 30,000 cars pass by it everyday and they give you sign space. I would only be there by appointment at first and depending it could move to me or a employee there full time. Another reason is I have some clients prefer to stop by a office to drop off their PC or when i have a meeting with a business needing consulting. I also much rather give out a business address then my home.

Rent is sub $200 for a 11x11 office which would include basic utilities and includes raised sign space.

Talk me in or out of it......

[salsashark]

what are the lease details? 1 yr, 3 yr, 5 yr? Gross or NNN? Does it require a personal guarantee? Are you incorporated? Personally, I think it sounds like a good move if you have clients that are gun shy about hiring people who work out of their home. $2400/year can buy a lot of advertising.


hmmm... I don't know, tough call.

[TurboGizzmo]

what are the lease details? 1 yr, 3 yr, 5 yr?
One year for now


Gross or NNN?

Not sure what this means?


Does it require a personal guarantee?

Doubt it but i am checking


Are you incorporated?

I am LLC currently


Personally, I think it sounds like a good move if you have clients that are gun shy about hiring people who work out of their home.

Its also nice to say "Let meet at my office" when i working with bigger clients.


$2400/year can buy a lot of advertising.

Again i am not looking at getting a giant influx of customers right away, but its just small justification for the office space to have a spot to advertise.



hmmm... I don't know, tough call.

Tell me about it, the fact that I can walk there in under two minutes from my house is whats really driving this space for me......

[asp_125]

That $2400 (or part of) is also an expense that can offset your taxes.

[TinkerinWstuff]

gez Giz, you can't hardly rent a storage unit that size for the same price let alone the sign space. Walking distance from home.... "sorry honey, I have to go work at the office."

[salsashark]

One year for now For one year, it's certainly a good test to see if it's worth it


Not sure what this means?
Typical commercial leases are done in two fashions. Gross and Triple Net.
Gross = tenant pays one bill, landlord takes care of everything. I'm guessing that since you said the utilities are included, I'm leaning toward this.

NNN (triple net) = tenant pay's the rent price + a % of common area maintenance like snow removal, taxes, public service etc...

Typically commercial retail and warehouse are NNN, Office spaces are Gross leases.


Doubt it but i am checking

I am LLC currently

I'd consider incorporating before signing a lease in case something bad happens, you don't want to be personally on the hook for rent. The only reason I say this is that we're in the middle of the commercial mortgage foreclosure boom right now. I'd want to cover my ass as best as possible.



Its also nice to say "Let meet at my office" when i working with bigger clients.


Again i am not looking at getting a giant influx of customers right away, but its just small justification for the office space to have a spot to advertise.


Tell me about it, the fact that I can walk there in under two minutes from my house is whats really driving this space for me......

Sounds to me like you've already answered your own question, now you're looking for concurrence :)

If you have the business to justify it, 2400 bucks for a year is not an unreasonable amount to spend to see if it works.

If, after a year, it's not worth it, don't renew the lease and go along your marry way.

[longrider]

I dont know your business but it sounds like working out of your home does not present the best image and if that is the case I would go for it. Except for on the internet $200 does not buy much advertising so the signage could be valuable.

The different types of lease Salsashark mentioned are a gross lease where your payment is the entire amount due. A NNN or net-net-net lease is where you are also billed for property tax, insurance and maintenance obviously on a pro-rated basis

[TurboGizzmo]

Thanks for breaking it down Salsa....I know what i would like to do but want to make sure it makes sense outside of my excitement...the whole building use to be rented by a company which moved on to a much bigger place. The guy has been trying to rent the whole thing for awhile now but recently offered to break it up.

Its owned by a older person thats owned it for 20+ years so that makes me feel a bit better from a landlord standpoint.

My company is advertised as "Technology Consulting" and ranges from simple virus/spyware cleanup to managing small companies IT needs without having a IT staff on the payroll fulltime.

[Wrider]

Why don't you just torrent it? That way you don't have to return it and it's free!
Ohh, wrong office space.

[CHRISTIAN COWBOY]

I would rent it..it is your business that you are advertizing and a small price to pay for getting your name out there. Dex phone ad's ran 2400 per year and generate little return on my investment. I have Logo's on my Van's that pick up business whenever we are on a project. It is the image of sucess that you portray by having an office too.
My company PDQ Flooring Inc., wave if you see us on the road..

[MetaLord 9]

Not sure what your revenue stream looks like or your balance sheet, but I'd say that $200/month seems to be a fairly affordable risk that sounds more likely to pay off than go dud. Plus, if you can write it off in your taxes, it sounds like a no-brainer, as long as you're able and willing to cope with the growth.

+1 on the incorporating. Let the Inc. take the hit if you go through a bad spell

[TinkerinWstuff]

these days most financiers require a personal guarantee anyway

I'm no lawyer but I deal with business owners on a daily basis. Basically incorporating protects personal assets from lawsuit should one of your customers or employees try to sue you for damages. As far as debts go, you can't hide behind an Inc.