Choosing between long-term and short-term furnished office leases often comes down to your goals. Companies that want to establish a business presence in a specific area may benefit from a long-term furnished office lease, but companies that are focused on expansion may benefit from short-term furnished office leases.
The importance of office space for businesses
No matter what type of business you run, you likely require office space. For some business owners, a home office will suffice. For others, a furnished office is the way to go. An office serves as a place to conduct business, but it can also be a place where you can store and organize business documents and conduct meetings.
Difference between long-term and short-term furnished office leases
When it comes to securing a furnished office lease, business owners will generally need to choose between short-term and long-term lease options. A long-term furnished office lease is defined as a lease in a furnished office space that lasts five years or longer.
A short-term lease of a furnished office space is generally defined as being less than five years with the average short-term lease lasting around three years. Some virtual offices, coworking spaces and other office frameworks may have month-to-month or even hourly lease options. These types of arrangements typically do not include furnishings aside from the use of shared desks and community areas.
Benefits of Long-Term Leases
There are a number of benefits that come along with long-term furnished office leases, including stability, predictable costs, the ability to customize the space and more.
Stability and Consistency
Stability and consistency are two of the biggest benefits of signing a long-term furnished office lease. With a long-term lease in place, business owners can plan for the future more effectively knowing that they will operate out of a specific location.
Predictable monthly costs
A long-term lease typically comes along with predictable monthly costs. If costs can fluctuate, this should be included in the lease terms, but by and large, the costs associated with a long-term furnished office lease will not change for the duration of the lease term.
Ability to plan for future growth
A long-term lease means having the ability to plan for future growth. Since an agreement is put in place that allows a business to operate out of a furnished office for the lease period, business owners who sign these agreements can chart growth without worrying about having to move in the middle of an expansion.
Customization Options
Many office space owners and property managers are willing to allow for customization of office spaces when a long-term lease is in place. Because your business has an agreement to stay in one place for a set number of years, you will likely be able to do things like add walls or partitions and change out certain fixtures.
More opportunity to personalize the space
Business owners generally have more flexibility when it comes to office personalization when a long-term furnished office lease is in place. Adding décor to match your brand’s personality can help employees feel more connected at work. You can also add things around the office to aid in relaxation, thereby increasing productivity.
Investment in long-term improvements
When you have a long-term furnished office lease, investing in long-term improvements of the space makes more sense. Since you will occupy the space for a while, the investments your brand makes in improving the space can deliver a higher return compared to leasing an office space on a short-term basis.
Branding and Image
When visitors, clients, vendors, prospective employees, media professionals and others come to visit your office, having a branded space makes a difference in how your company is perceived. A long-term furnished office lease allows more flexibility to brand your space, potentially paying off by enhancing your company’s image.
Establishing a strong presence in a specific location
A long-term furnished office lease allows businesses to establish a strong presence in a particular area. Because these leases tend to last for years, they provide business owners with opportunities to connect with local customers and network with complementary businesses and vendors in the area.
Building credibility with clients and customers
Since a long-term furnished office lease lets companies build a strong presence in one area, this translates to credibility in the eyes of customers. When customers see that your business is a part of the community, they are more likely to trust your company over a fly-by-night competitor.
Drawbacks of Long-Term Leases
Although long-term furnished office leases have benefits, there are some drawbacks that come with these types of agreements.
Financial Commitment
A long-term lease generally requires a long-term financial commitment. This may not be advisable for companies that do not have stable funding or revenue.
Higher upfront costs
Some long-term lease agreements may involve higher upfront costs. These costs can eat into capital that may be used more efficiently for other business costs.
Benefits of Short-Term Leases
Short-term leases of furnished office spaces are leases that typically involve lease terms of less than five years. Short-term leases can be beneficial depending on the type of business you run and your future business plans.
More Flexibility
A short-term furnished office lease offers more flexibility for businesses that plan to expand or relocate in the future.
Lower Commitment
A short-term furnished office lease requires less commitment compared to a long-term lease.
Seasonal Trends
Short-term lease agreements can be a better option for seasonal businesses that only require furnished office space for a few months or half of a year.
Drawbacks of Short-Term Leases
A short-term lease can provide benefits to some businesses, but they also have some drawbacks that may make them a poor fit for other types of businesses.
Higher Costs
A short-term lease may incur higher monthly costs compared to a long-term lease. Part of the reason for these higher costs is the instability and inconsistency that the lessor takes on.
Fewer Options
You may find fewer available options in your area when seeking a short-term furnished office lease. This is because many commercial property owners want the stability and consistency that come with long-term leases.
Frequent Moving Costs
If you sign a short-term furnished office lease, you may end up spending a lot in moving costs as your company transfers from one office space to another over time.
Uncertainty
There is a degree of uncertainty that comes along with short-term furnished office leases compared to long-term leasing.
Which Lease Type is Better? Depends
When deciding between a short-term furnished office lease and a long-term furnished office lease, which lease type is better depends. If you plan to stay in one area for a while and prefer stability, a long-term lease may suit your needs. If you want added flexibility and are not tied to a specific geographic region or work with remote teams, a short-term furnished office lease may be the better solution.
Frequently Asked Questions
What is the difference between short and long leasehold
The difference between a short and long leasehold is that a short leasehold agreement typically lasts for less than five years, and a long leasehold usually lasts for five years or longer.
What is a short-term commercial lease
A short-term commercial lease is a rental agreement in which an entity leases a commercial property for a relatively short period of time. These agreements are usually put in place between business owners and commercial property owners or managers.
What is the most common lease for office space
The most common lease for office space depends on factors like the type of business leasing a space and the location. Typically, office space will be leased under a gross lease. This type of agreement includes property insurance and taxes, utilities and maintenance in the cost paid by the lessee.
How long are most office leases
Most office leases in a traditional furnished office run for between three and five years. Short-term leases for less than a year may be available.
How long is a short-term commercial lease
A short-term commercial lease typically lasts for less than five years but may be significantly shorter.
How long are most commercial leases
Most commercial leases are between three and five years; however, some long-term leases may extend beyond this time frame. Additionally, some commercial leases will be extended upon conclusion, potentially lasting for many years.
What is the best commercial lease for a tenant
The best commercial lease for a tenant is one that takes into consideration the tenant’s business goals and long- and short-term plans.
What is the point of a long leasehold
The point of a long leasehold is to secure a leased space for a relatively long period of time. This allows the lessor and lessee to have stability and consistency in a lease agreement.
How many years is a long leasehold
A long leasehold is typically considered to be five years or longer in duration.
What is a lease for office space
A lease for office space is a real estate agreement in which a property owner or manager agrees to rent out office space for a set amount of time and money to an entity to occupy the space as a tenant.
Is office space an operating lease
Office space is generally considered an operating lease as long as the lessee does not have an agreement in place to take over ownership of the office space.
What is the most common lease length
The most common lease length for a business leasing furnished office space is between three and five years. This agreement may be extended upon the completion of the original terms.
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