Posted in Commercial Real Estate

What Does the Rent Include?

There is no simple answer to the question of what is included in the rent. This is because the answer will likely vary from one property to the next. Some buildings may include a variety of items within their rent while others may charge tenants additional fees as needed and still others may require the tenants to register directly with individual public utilities and handle these expenses on their own. 

Likewise some properties may include additional features with the price of the rent while others may charge additional fees for these features. An exercise room, a meeting room, after hour HVAC service or additional parking are just a few examples which may be offered by an office building. In most cases the use of these amenities are included in the price of the rent but there are exceptions where the tenant is charged an additional fee for the privilege of using these amenities. 

Consider the Price of Utilities

When considering the price or a rental property, the renter should first determine whether or not utilities are included in the cost of the rent. This is significant because depending on the size of the property and the climate of the area, heating and cooling costs can be rather expensive. In most cases, the tenant is responsible for the cost of their own utilities and their unit is individually monitored for usage and the renter is billed monthly by the utility company. However, depending on the type of property (Office, Industrial,Retail, etc), the landlord may collect money for utility uses in another way. Depending on the lease agreement between the landlord and the tenant the monthly rent may be set at a rate which includes a contribution to the utility costs or the tenant may be assessed a predetermined percentage of each utility bill on a monthly basis. 

It is important to consider the price of utilities when they are not included in the rent because failure to do so can lead to unpleasant surprises in the future. For example a tenant in South Florida, “a very hot and humid climate” may rent a spacious office space for a great rate only to find out later that the cost of cooling the office makes it difficult for the tenant to afford the suite. 

Consider Amenities which are “Free”

When business owners are selecting a property in which to run their business, they should consider the features and amenities which are “free” as opposed to the amenities for which the tenant is charged an additional fee. The word free is used in quotations in the heading of this section to indicate these amenities do not always come without a price. A tenant may not pay a usage fee for some amenities but it is very likely the privilege of using these amenities is factored into the monthly rent.

As an example consider two 800 square foot office spaces in the same geographical area. Each office may have a similar layout and comparable square footage but the monthly rents associated with these two offices might be quite different. In examining the amenities you might notice the higher priced office has access to a meeting room, an exercise room and an employee lounge for the use of its tenants while the lower priced office offers no such amenities. In this case the occupants of the more expensive offices are actually paying a higher monthly rent as a result of the amenities offered.

In a case such as the example above, tenants should weigh their options carefully. If they can afford to pay the more expensive rent, they should carefully consider whether or not they wish to pay a higher fee for use of the amenities. A business who doesn’t need a meeting room, has employees who belong to other gyms and does not have a great deal of free time to use the facilities may decide they would be better off selecting the lower priced office without amenities.

Author:

Amy Gamarra: Broker Principle of Aim Higher Commercial Real Estate Group •President of Toastmasters en Español Club #971 since July 2018 •Experience in Real Estate Since 1997 •Member of MLS / FAR / NAR / Miami Commercial •Member of CREW •Member of DREIA / BREIA •Business Administrator •Experience in Social Media and Marketing •Specialized in Office / Warehouse Leasing and Sales I have a Degree in Business Administration. I previously held Licenses in Health, Life and Variable annuities, Investments Series 6 & 63. I have attended numerous seminars that improve skills such as Sales, Leadership, Marketing, Management and Team Building techniques. On my spare time I earned an Associates Degree with Logos Christian College and Graduate School in Bible Studies in addition to Traveling throughout the United States to study Real Estate Investments and Creative Financing. People say I am very organized. I have a talent for creating business systems and strategies that make sense and are successful. My experience in Finance and Business makes Commercial Real Estate the perfect fit for me because I understand what business owners need and what they are looking for in a Commercial Broker.

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