Philadelphia holds one of the most important historical spots in the United States since the signing of the Declaration of Independence in 1787. It also owns the moniker as the City of Brotherly Love and is home to friendly people that have a rich culture. Therefore, many opportunities arise within the city.
Plenty of people take the chance to lease out their empty spaces and turn them into cash. Why not try it for yourself? Here are some tips if you want to start a rental business or you’re looking for an office space for rent in Philadelphia.
What is Office Real Estate?
While both office and residential rental businesses fall under real estate, the former falls under commercial, which is valued higher than the latter. The reason behind it is because it sustains higher property taxes. Sometimes, it can soar as high as 50% of the property’s fair market value.
Even if that is the case, it only means they have higher potential returns. Keep in mind that an office space for rent in Philadelphia costs anywhere from $35 to $46, although an average 12-unit building size of 14,600 square feet can be at an average of $2,795,000.
What are Your Responsibilities as an Office Space Landlord?
Remember that office space tenants have a very different requirement than residential ones. Also, each industry requires various infrastructures. For example, a public relations company in Philadelphia only requires desks, chairs, reception area, private offices, and board rooms. However, an IT firm would need a whole lot more. Even though your office space is fully-furnished, prepare for renovations requests. Although, you could back up the claim with a more extended lease contract, which usually lasts for at least three years.
As an office space proprietor in Philadelphia, you’re the one responsible for handling tax issues, maintenance, and business permits regarding your commercial real estate. As a business owner, you also have to issue official receipts as approved by the government.
There are other governmental laws to follow, like fire-safety permits. These rules are pretty stringent, and with every violation come a hefty fine.
What Do You Need to Get Tenants?
Aside from submitting to legal requirements, you also have to hire reliable people in Philadelphia to succeed in the business. Some of them include the following:
- Commercial real estate brokers help you find tenants who, as much as possible, find your venue fitting for their needs. They would also be the one who would do all the negotiations regarding rental rates and demands, which can sometimes get too much.
- Since dealing with contracts is a crucial matter and requires absolutely no loopholes, it’s something you must leave to the experts. Therefore, you must hire a lawyer to draft one for you.
- If you’re still on the process of looking for a location to erect your business, it would be better to hire a location manager who knows the ins and outs of the area. They would find efficient landmarks for you and tell you of other factors that could affect your business, such as public transportation and trains.
Despite the last part being purely optional, if you must do it yourself, keep in mind that identifying an ideal location is vital when it comes to office rental. Fortunately, it’s not that much of a problem in Philadelphia since the whole city is urbanized and has adapted to the business needs of people.