If you are not a major corporation, chances are you do not own your own company building. But, is it better to rent a pay-by-the-month office space or agree to a long-term lease? We broke down the biggest pros and cons for each, so you can decide for yourself.
What’s the Difference Between Monthly Rentals and Long-Term Leases?
Monthly office space rentals allow you to pay by the month without any further commitment. Long-term leases are agreements that you will pay monthly rent for a fixed number of months or years. The biggest difference between monthly rentals and long-term leases is convenience. With monthly rentals, you are free to move your business during any month of the year. With long-term leases, you are committed to staying within that rental space for the duration of your lease agreement term.
Monthly office space rentals like LocalWorks offer the same amenities as long-term leases in ideal locations without the commitment.
Cost is a big difference when it comes to monthly office space rentals vs. long-term leases. When you agree to a long-term lease, you must be prepared to spend a massive sum of money on the security deposit and upfront rent, which can likely be $50k or higher right off the bat. Monthly office space rentals from LocalWorks are lease-free, meaning you only have to pay the monthly cost without any expensive deposits.
Pros of a Monthly Office Space Rental
Month-to-month flexibility and no long-term commitments are the key benefits to monthly office space rentals. For startup companies, these benefits are huge. In a volatile market and unsteady economy, these benefits could be the difference between staying in business and going bankrupt.
Less commitment means more freedom to make smart financial decisions with your business, whether you are a startup or a company running for over 10 years. It also means you have the freedom to relocate your business to where the demand is.
If the pandemic taught us anything, it’s that life can change quicker than anticipated. Being free from long-term commitments and going month-by-month means that you are better equipped for rapidly adapting markets. You can focus on increasing profit margins by saving on expenses wherever possible.
Another way you save money through monthly office space rentals is by avoiding a lease agreement. With a lease agreement comes expensive fees, including upfront rent and security deposits. These can put a huge financial burden on a startup with no guarantees that they will be able to recover that cost down the road. Monthly office space rentals are more like subscriptions. You only pay for the monthly cost (rent) and all the amenities are immediately provided with no hidden fees.
Here are the other benefits of having a monthly office space rental:
· They promote growth: When you begin to hire more employees and need more space, monthly office spaces allow you the flexibility to upgrade to a bigger office space without have to wait for a long-term lease to end.
· You can move where the money is: You have the flexibility to move wherever your market/customers go within a month’s time. Industries are always changing, and new hot spots are great targets for increasing your revenue.
· The amenities of a long-term space: Don’t worry about your monthly office space not providing all the essential amenities as a long-term lease office. If you need more amenities, you can browse different monthly office space rentals and move your business there in a month.
Monthly office space rentals provided from companies like LocalWorks are conveniently located in ideal and highly populated areas. They offer the same amenities as long-term leases without the long-term commitment attached. Unlike long-term leases, the amenities are included in the monthly cost, so you don’t have to spend additional money to provide them yourself.
Cons of a Monthly Office Space Rental
With monthly office space rentals, there can always be cons to be aware of. The more you are aware of them, the more you can prevent them and still reap the benefits of monthly office space.
The biggest concern people have with monthly office space rentals is security. Of course, security matters when it comes to anything, especially your business. On the upside, being aware of matters to ensure the security of your monthly office space allows you to find ones that protect you and your company’s privacy and safety.
Always makes sure that you ask about security precautions before agreeing to a monthly office space. Companies like LocalWorks offer security within their amenities at each of their locations for no additional cost. If you have already agreed to a monthly office space, it’s great to ask if you haven’t done so. After all, your commitment to that space is only for one month at a time.
Pros of a Long-Term Lease
The biggest advantage of a long-term lease is that you reduce the risk of rent increasing too often. Long-term leases mean your rent will not increase until the lease agreement needs to be renewed. This can save your company some money in the meantime.
However, deciding on a lease term length that is longer means that you are in a longer commitment to stay within that building. If you begin to experience problems with the location of the building itself, you will have to wait until your lease is up before you can relocate and stop paying rent there.
Cons of a Long-Term Lease
The biggest con of a long-term lease is the commitment. It does not give you the flexibility to change and adapt to the situations surrounding both your business and the location of your office. Being prepared for the unexpected is key to driving long-term success in any business. To get that in your office space, you should look into monthly office space rentals instead.
If your company begins to experience hard times, you are committed to that lease for however long you agreed upon within the terms. If it becomes too expensive, you are not able to back out of the lease agreement and go somewhere more affordable.
No one can predict how their business will be doing in more than a year. Committing to a 3, 5, or 7-year lease is a massive risk, especially with so many other options, such as ready-to-go subleases and monthly office space rentals available.
Another reason flexibility is important is due to the location of the building. Signing a long-term lease means that you are prepared for the location of your building to stay the same or improve over time. Increases in crime rates, unsafe conditions in the surrounding area, or even a lack of security within the building itself could hinder your company’s success and force you to move.
When you agree to a long-term lease, you are expected to provide the amenities that your office space will need. Cleaning, utilities, security, furniture, printers, coffee/water machines, internet, networking, wifi, etc. are all additional costs that can add up to $5k+ per month. When you agree to a monthly office rental space like LocalWorks, all of these amenities are included.
Where Do I Find Monthly Office Space Rentals?
There are monthly office space rentals inconvenient and ideal locations all around the United States. LocalWorks offers monthly office space rentals across New England, Metro D.C., and Greater Chicago. Each one is located in a highly populated area filled with surrounding entertainment, restaurants, salons, gyms, etc.
When choosing a monthly office space rental, look for one that is located around an area that would benefit your company. Maybe your company offers services in that area, or your distributors are located close by. Whatever the reason may be, you can choose a monthly office space knowing that you are free to move during any month of the year.
