All, I am currently negotiating to buy the location I operate out of.
To offset the increase in monthly overhead I have decided to rent
out extra parking spaces behind my building to local merchants. I
know what these spaces will command. I have also been approached by
an individual who does jewelry appraisals who is looking for a place
to office. I have a 150sq ft office room that would work great. He
will need to share some of my equipment such as safe space, phones,
steamer and ultrasonic.
I have no Idea how to determine what is a reasonable lease rate. Do
I simply determine What my monthly overhead is and charge according
to what percentage of the space he will be using ?
I am excited about the prospect of having an in house appraiser. I
believe it will help me add one more layer of professionalism to my
growing business. I also imagine it could only increase traffic.
But, I don’t want to sell myself short either.
Any thoughts on this dilemma would be appreciated.
I would figure at least 1.5 times the overhead based on square
footage since he is also using some of your equipment. Don’t forget
the added liability insurance you may need to cover his clients when
they are in your area or at least write that into the contract that
he is liable for all his clients injuries. I see 2 areas of possible
conflict - the first is you mentioned him using your safe. What if
you are not there and he is? Is there adequate security of
individual locked areas within the safe? Something is found to be
missing later - maybe a single 3 carat diamond wholesaling at
$22,000+. Who’s responsible for its disappearance? Would it not be
better that he has a small safe of his own that he is responsible
for? Secondly, one person is on the phone. The other person needs
it to process a credit card sale. A sale is lost because a different
sale / a date / on hold for a doctor’s appointment scheduling is
trying to be worked out over the phone. Phone is cheap. Have him get
his own line.
John, I suggest adding in all your overhead to your mortgage rate and
come up with a price per square ft. Then add 5% for as a utility
buffer. Your tennant should have their own phone. This is how I do
it for Metalwerx and I get a very fair price for everyone.
In your sublease, make sure you allow for a prorata operating expense
pass-through to your subtenant when your landlord passes this
increase on to you - most leases seem to have this term based on
actual increase in DOE or CPI type increase as I recall. JoAnn Dean
trying to get the guts at the moment to fuse 140 fine silver
granules all at once - will she win or will she lose this first
time??
