With more employees opting to work from home, many small businesses are either looking to downsize or to take advantage of very affordable commercial lease rates.  Your ability to make the best possible deal on the lease terms for commercial space can make or break your business. Whether you’re a new business or an established one, it’s important to keep the following tips in mind before you sign.

Find an agent

It may seem easy to use the services of the landlord’s agent when you try to find commercial space to rent. However, it’s a bad idea. The landlord’s agent has the landlord’s best interests in mind. They will try to get you to agree to as high a level of rent as possible. If you have your own renting agent, they are worth their weight in gold.  They will try to get the rent down, obtain a leasehold improvement budget and are there to advise and represent your interests.

Have a financial plan ready

Before you begin to negotiate, be sure to go in with all your financial documents. You need to be ready to answer questions about your finances. If you’re a new business, you’ll need a backup plan to make sure that the landlord accepts your terms. You should provide the landlord with guarantees of payment, and copies of your financial statements. A personal guarantee — an agreement to personally pay the rent even if your business can’t – should be avoided at all costs.

Obtain a favorable CAM section

Some leases include a CAM (common area maintenance) section on a lease.  This can be one of its most important parts. Often, renters are surprised at how much they need to pay. Before you agree to a CAM payment, it’s a good idea to ask to be shown what the common areas are, so that you know what you’re paying for. It’s important to make sure that you aren’t paying for the landlord’s advertising expenses or for his lawyers. You should also make sure that the contract doesn’t make you pay administration fees greater than 3 percent, or build-out costs for other rental units.  If you can avoid paying for common area costs, do so.

Make sure that you only rent as much space as you need

Often, landlords’ agents try to push larger lease units than their business renters are willing to go for. They may tell you that they will give you a deal on a larger space. While they may give you a deal, you’re still likely to end up paying more than you would if you rented a smaller space. A deal isn’t really worth it if you can’t afford it. If you do believe that you will need to expand one day soon, make sure that the contract has a right of first refusal clause for the unit next door. When you have such a clause in place, the landlord is required to first ask you if you would like to rent the space, before giving it to someone else.

Study the lease documents closely

Your lease documents may be full of legal terms and may make for a dry read, but it’s still important that you go through every line. If something that you asked for isn’t in the agreement, you should make sure that you put it down in writing. You should also make sure that there’s nothing included in the rent agreement that you aren’t aware of. The start date, the end date, the rent escalation clause, the termination clause and other terms should be exactly as you discussed.  It’s not a bad idea to run this past your lawyer for review as well.

Think about a trade

Landlords often offer tenants rental discounts in return for longer leases. You should ask the landlord about what kind of incentives they are likely to offer.

It’s important to realize that leasing deals are always negotiable. When you go in aware of the fact that you can get the landlord to give a little ground in different areas, you’ll be able to get the best terms possible.