With the economic still looking sluggish, even business owners are in a frenzy trying to reduce overhead costs so as to boost their company’s cash flow. One way of doing so is to negotiate with their landlord on a rent reduction. Here are nine ideas that you should take note of when discussing with him about a possibility to slash rents.
Firstly, hire a commercial real estate broker, who is skilful and knowledgeable. Work on a fee with him based on the actual reduction that you are looking for. Do a market research. Have your broker carry this out for you. Check several properties which are currently in the market for rental. Compare the various rents they are charge and even check out the premises to find out if the property is worth the asking rent. You may also ask your broker to do a market survey of a number of completed lease transactions. This will give you an idea of what the latest rate is.
With all this information, you will be able to come up with a cross comparison of the current property and the ones available in the market. See how the current property fits in with regard to this. Now begin the discussion. Provide the landlord with a proposal that outlines the terms and conditions of the desired rent reduction. This proposal should spell out to the current owner that properties available for rent in the market usually remain vacant for 3 to 6 months before securing a tenant. It should also show that many landlords are letting tenants rent the property for free for a couple of months before charging.
In trying to get a rent reduction you may need to be willing to extend your lease should you the reduction. This will give the landlord an incentive to agree to lower the rent. Also, be aware o adjustments that may be tied to the consumer price index with no ceiling. If this is the case, you may have to adjust your rents according to the inflation rates. With a shortage in the demand for tenants, the rental rates might increase in the years to come. Be willing to share financial information with the landlord so he knows you are genuine in your need to reduce the rent. Discuss this deal with a positive attitude but do not come across as being demanding or tough. Go prepared and impress the landlord who would be left with little choice but to agree to your offer.