Posted by on November 18, 2019

Deciding whether to sign a short-term or a long-term lease can be very difficult. Whether you are renting an office, retail, or warehouse space, this decision can be crucial to the success of your business. Short-term and long-term leases each have their advantages and disadvantages, and neither option is inherently better than the other. The appropriate choice will depend on your needs, the risks you’re willing to take, and the money you are willing to commit to spending.

Advantages of a Short-Term Lease

A short-term lease is usually associated with higher rent costs, less leverage in negotiations, and lower supply. With that said, a short-term lease has two great benefits:

  • Flexibility: For businesses that are new, growing quickly, or cutting jobs, a short-term lease gives you the flexibility to expand or downsize your space. You won’t need to feel overwhelmed by a long-term lease agreement or confined by the lease terms.
  • Safety in the event of business closure: Unfortunately, not every business ends up making it. It’s the nature of the game. In the event of the unthinkable, a short-term lease can be a lot easier to get out of—or at least less costly to finish out—than a long-term lease. 

Advantages of a Long-Term Lease

If you have an established, stable company with a plan for the future, a long-term lease might pay off with the following benefits: 

  • Predictable costs: Since you know exactly what your rental costs will be from year to year, your rental expenses will be stable regardless of market conditions.
  • Fixed location: Having a fixed location for your business in the long term gives you the peace of mind to focus on other things. 
  • A powerful bargaining chip: Property owners will often make concessions for long-term leases, such as lower rates and beneficial renewal and expansion options. You are providing sustained income for the building owner, so he or she will have an incentive to sweeten the deal.

We Will Help You Decide Which Option Is Best for You

There are many options to weigh, and we understand that the process can be difficult and stressful. Cummings Properties is here to offer your business the leasing options that will help it succeed. Contact our leasing team today so that we can help you find the right space and lease length for your business.