I'm glad you stopped by my website. I am Rafael Singleton. I always felt that there wasn't enough information available for those who would like to do a little renovation or those who would like to engage in their own construction projects. There is a lot of information that would be helpful for a professional construction contractor, but I always had a difficult time navigating the resources out there as a layman. I'm the type who always likes to take the initiative to get something done if I notice nobody else stepping up to the plate, so I decided to create this website focused on construction.
When entering a lease, you might be expected to perform renovations to the commercial space as part of the agreement. The landlord may pay for a portion of the cost of these improvements, but you will also likely need to pay for a portion yourself. As long as you're aware of what is required upfront, you'll be able to benefit from the agreement.
Determining the Scope of the Project
Depending on the space, you may need to perform a little work or a lot of work. This needs to be considered if you are a new business and you're trying to keep startup costs low. However, if the landlord will pay for the improvements and you are able to keep the costs lower than the agreed upon renovation costs, you won't have to pay out of your own pocket.
Considering the Types of Customization You'll Need
The improvements often include any customization that you would make to suit the needs of your business. For example, retail spaces will often need to make changes so that the building better matches the branding efforts of the company leasing the space.
Receiving an Allowance for Improvements
Make sure that the landlord never gives you the money to pay for the improvements. Instead, the landlord needs to pay for the improvements directly. Otherwise, you risk the landlord considering the money received to be taxable.
Negotiating the Allowance
Your ability to negotiate for an allowance will usually be based on your credit score, the market you are in, and the rental rate. The more you will be paying in rent, the more likely that you will receive an allowance with which to make improvements.
Taking Control of the Process
If the commercial building is small, the landlord will likely work with a construction manager and will prefer to hire their own contractor to perform the improvements for you. However, with larger properties, you may be more responsible for handling it yourself.
There are many advantages to handling the process yourself. For example, you may be able to reduce costs and you may seek out more competitive bidders. Therefore, it's worthwhile to request that you be allowed to hire your own commercial tenant improvement contractor. However, if the landlord insists that he or she handle the process, you should ask to at least be a part of the process and see the agreement that is drafted.Share