If you’re looking to open a business in the Michigan area with offices or a storefront, you may need to sign a commercial lease. As commercial real estate can be more difficult to navigate than the residential equivalent, it is important to know the different types of commercial real estate leases that are available.
What are the common types of commercial leases?
- A full-service or gross lease only requires the tenant to pay one bill, as all associated costs are included
- A net lease requires the tenant to pay rent, as well as a share of the building’s maintenance and utility bills as well. There are several types of net leases, with varying additional expenses included
- One of these types is called a triple net lease and generally has the lowest rent, but the tenant is required to pay all operating and maintenance costs
- The other types are single and double net leases. With a single, the tenant pays rent, utilities and property taxes, but not maintenance or insurance. A double requires rent, utilities, property taxes, and insurance, but not maintenance.
Which one should you choose?
The best commercial real estate lease for you will depend on your exact situation. If you’re mechanically inclined and have both the time and energy to complete maintenance tasks, it may be less expensive to get a triple lease. This prevents you from having to pay costly repair bills, although you may prefer to sign a single net lease and only pay part of those costs if you’d rather spend your time focused on your business.
After you decide which type of commercial real estate lease will work best for your business, you can narrow down your searches and help your dreams come to life.