Negotiation tips for possible residential/commercial lease with landlord of derelict property

[Deanna]

Looking at a house zoned commercial, to be used for office space.



I live in a small town with few options. A property requiring a fair bit of work is a possibility, and I am willing to concede that I will have to pay for a lot of the improvements. This landlord has a reputation for not returning damage deposits no matter how good the condition the property was left in.



Any ideas on negotiating 'extras' to compensate for possible non-return of damage deposit as well as need to complete significant repairs (estimated at $5K).



This property is the best option I have seen since I started looking 8 months ago........



Thank you!

 

[brentdavies]

Sounds like your options are limited. Why go to a guy with a bad rep?



Do you have customers coming to your business location or you meet away. If your customers come to you, you need a certain professionialism look to your business. Clean and presentable, etc.



Things I review with my commercial clients.



Property must be zoned for the type of business you doing in the property. The local town may have restrictions on the type of business in the that area. Must know before signing any lease. Hairdressers can be turned down due the number of customers coming to the door every, especially in residential neighborhoods.



Lease incentives depends on the length of lease you are looking for. 5 year commercial lease, with a tenant improvement allowance, free rent and option to renew are the things I like for every lease.



So ask a 3-5 year lease, with 5- 10 K for improvements, (either you do or the landlord, before a certain date), free rent , 1-2 months per year, and an option to revew the lease for x years in the future. There is no such thing as a standard lease. Every deal is different.



If you don't ask, you don't get.



The landlord may ask for personal guarntees, triple net lease or variation of common area maintence charge back(if he a residential slumlord, he won't know what I am talking about), and wount give any tenant improvement allowance.