I am meeting with the agent later in the week so i will see what they are after.
I wont be going in low balling as such, but it needs to be good value.
There is 2 very similar spec places on the market at moment, 400 meters apart so its basically choosing 1 over the other.
Basic specs are
Property 1
Size: 302 Sq Mtrs with No current fitout.
Asking 24K+outgoings
property 2
Size: 310 Sq Mtrs with No current fitout.
Asking 18K+outgoings,
Only different this has 2 toilets.
Property 1 would be a few years newer, but both are of similar quality in finish. Property 2 would have more drive by traffic but not really important to me. Property 2 has been vacant for longer. I believe its been vacant for some time now, like years which may explain the lower price rent.
I am meeting with both agents later in the week to inspect both.
A good idea to compare both. There's definitely a reason why P2 is significantly cheaper on face value. Also request outgoings for both properties
Knowing what i can get Property 2 for it sets a benchmark for offers for property 1.
I planned to offer something around the following
Without looking at them yet, basing this on what is seen on the advert online i prefer property 1.
For Property 1 I was thinking of offering something like
* 3yr +3 lease.
* First year, $17k PA +Outgoings.
* Second year $18.5k PA +outgoings.
* Each year after this. Either a fixed rate increase per year or CPI (not sure which is the best option for me.)
* First option to buy before put on the market
* If gets advertised, last chance to match offer before sold.
(if owner decides they want to sell i want to have first chance to buy or at least last chance to match a current offer on the table for its a signed deal. Just dont know how to word this)
I cant afford to buy now, but i will be able to in 2-3 years if the opportunity is there.
This is referred to as a 'first right of refusal'. Basically if the owner decides to sell down the track, they can't sell without first asking you if you're interested.
* 3 Months rent free or 1 month free and 5 months at half rate.
It's good that you're giving the owner options, as they may prefer one or the other. However, offering a price significantly below the asking price, and asking for a further 8.3% rent free incentive may offend them so be careful.
* Option to sublet (I am considering my options here. 1 business plan option I am considering is to have a small business share the facility. This concept is not set in concrete but I want the option there if its the option i choose)
Usually you have the right to sublease - but the owner has to approve the sub-tenant and their proposed usage.
* Ground level fit out at My Expense with option for landlord to buy fit out at termination of lease or remove at my expense. (don't know exactly what to do here, how to word it, etc)
I've never seen an owner purchase a fit out installed by a tenant. They may allow you to leave it, but usually there will be a make good clause in which you will have to remove it. A fit out will not improve the value of their property, as future users may or may not see value in it.
If you offer to leave improvements such as air con, new carpet etc this may help you get the rent free and/or reduced rental but don't expect them to pay you for something you've installed which is specific to your own usage.
* Open door for negotiation in future expansion of fit out for Mezzanine.
I don't know how this will work but my thoughts are if i expand my business i may need to increase the floor space with a mezzanine. Do i put in the contract either, that i have permission to put in a mezzanine if i wish at my expense, or do i add more to it about possibility of negotiated rates and landlord expense?
Owner is unlikely to pay for mezzanine space as this is specific to your needs. In fact, they may even want it removed once you leave.
If council comes in and sees it after you leave, the owner will incur a cost to remove it. If it is being properly constructed and DA approved by council, then you might have a slight chance as this adds value. You probably won't have enough car parking to do this anyway, and you wouldn't want to put an improvement of this quality into someone else's property.
My business model has my requiring a mezzanine in around 3-5 years.
With mezzanine I believe the extra space will make the factory suitable for an additional 5+ years (past where my current business model goes to.
* Landlord (or who ever needs to approve) to approve my suggested Fit out plan before signing lease.
Usually you can do whatever you want internally, but you need to ask for owner's permission to do anything structural. You may be best to send through a rough drawing of what you intend on doing before moving in anyway. This will be covered in any lease.
Including
fit out of office space, and fabrication rooms
Exterior signage, A Frame at front of driveway
Exterior signage and A Frame will be the Strata Manager's decision, unless the owner owns the whole complex. I recommend looking at what signage everyone else in the complex has, as this is exactly what you'll be allowed to do. Most owners don't care about A Frame signs at the front, but council might.
I think that is it. If i have missed something let me know
Or if you think i have something wrong please help with wording.
Once i have everything i want in my offer i will put it together with a nice speal about my business and details about me.
A good idea. Shows you're serious and committed.
1 more question.
Should I engage someone to help ensure the lease is right or is this something i can comfortably do myself ?
Yes, get a lawyer to look over the lease. Also make sure you get an estimate of the latest outgoings (not the outgoings from 3 or 4 years ago).
Thank you again everyone
Regards