By Prasanth Gopinath on Jan 25, 2023 6:07:58 PM
Many entrepreneurs prefer leasing a property rather than buying it. It helps them conserve their business’s operating capital, avoid getting tied to an EMI, and stay on the same contract terms until the agreement expires. We appreciate your decision to lease a commercial property in Pune. But how visionary it will prove to be will depend on a few factors you should consider while signing the agreement. In other words, you should avoid these five mistakes to make an informed choice before you finalize the contract.
5 Mistakes to Avoid While Leasing Commercial Properties in Pune or Elsewhere in India
Leasing is more cost-effective than buying a property. Yet, it involves a considerable recurring investment. Besides, the property you choose will significantly impact your business. Hence, the key to leasing the right commercial property is to assess it across every aspect. Here are five common mistakes to avoid.
Relying on Imaginary Income Generation Figures
As an entrepreneur looking to lease a property, it is obvious that you are concerned about its business potential. Accordingly, the seller or broker will present various reports that indicate the property’s income-generation potential.
But while looking at those projection reports, beware of the word ‘Proforma.’ Now, what does that mean? Proforma reports signify that the figures and projections mentioned in the report are based on imaginary factors and not real ones. Hence, their accuracy or possibilities aren’t validated or may not be fully authentic.
In other words, the real picture might not necessarily be close to what the reports portray or be entirely different! Thus, insist on having reports from credible sources and those showcasing real-time figures to help you make the right decision.
Not Surveying the Property Fully
Another common mistake leaseholders commit is that they don’t survey the property fully. And, on the other hand, in many cases, the broker or seller doesn't show every aspect of the property. They might limit the leaseholder’s property tour only to its best or recently renovated areas.
But now that you know it could be possible, you must emphasize visiting every corner of the property. Have a professional property inspector with you to look at every aspect of the property and have him provide his observations.
Doing so can help you save resources you may have to invest in repairing damages or making changes in areas you did not assess initially.
Not Communicating with Existing Tenants
If you see tenants already operating in the building, discuss various aspects like the owner’s overall approach, maintenance frequency, promptness in resolving concerns and complaints, etc. Additionally, you must also talk about the business potential, the response they’ve been getting for their business, and factors alike to get real-time and ground-level feedback about the property.
Not Asking About Hidden Charges
Hidden charges can collectively add a lot to your lease amount. Hence, do not forget to ask about hidden charges to the property’s owner. For instance, the owner might charge you for the local and statutory taxes they pay, might collect the amount for impending repairs, and bill you for the premium they pay on the property’s ongoing insurance policy. Asking these questions is your right and responsibility. So, don’t ignore it and end up paying for something you are not liable for.
Ignoring Local Laws, Rules, and Regulations
Checking this out isn’t very apparent. But it can help you royally. Before signing the lease papers, you should be careful about the environmental laws applicable in the zone where you lease the property.
It is your business and your money. Hence, it is significantly your responsibility to determine if local laws allow you to do a particular business in the respective jurisdiction.
Discovering it later can not only involve a pecuniary fine but let all the investment down the drain. Let alone the reputational damages that will follow!
Lease or Buy a Commercial Property in Pune at Kohinoor World Towers
Kohinoor World Towers (KWT) is an under-construction commercial hub currently being constructed in PCMC near Pune. The massive business landmark offers a strategic location between the commercially significant towns of Pimpri and Chinchwad. Additionally, leasing or buying a commercial property here refers to providing your business with excellent connectivity and abundant B2B and B2C business opportunities.
KWT’s multi-sized contemporary office spaces suit the needs of multiple business domains. So, whether you are a startup or an established enterprise, KWT serves your needs with well-planned and intelligent office spaces and ultra-modern amenities. Call +91 20 6764 1818 to connect and explore KWT’s potential.