If you’re looking to reduce costs, subletting may seem like an attractive option. There are a number of possible pit-falls, however, and it’s a good idea to really do your research before signing a long term sublet lease.
Here are 5 potential dangers you should look out for when considering subletting office space.
No Direct Connection to the Landlord
When you lease with an outside company they must go through the sub-landlord who in turn goes to the landlord with any problems with your facility. This can be a problematic amount of red tape due to the numerous people who need to be involved in order to accomplish anything. There is also the potential problem of if the sub-landlord and the landlord have a shaky relationship. This tenuous relationship could trickle down to time and money wasted on your part.
You’re at the Mercy of the Sub-landlord
Why does the sub-landlord have extra space to begin with? Did they bite off more than they can chew when it comes to excess space? Have they had financial problems that have caused them to downsize? Regardless of the reason the sub-landlord could be in a precarious financial situation that he is trying to off-set with a subletter. Once again this could trickle down to a problem for you if the sub-landlord is suddenly no longer able to meet his financial obligations. This could cause you and your company to need to abruptly relocate regardless of your lease.
Lack of Flexibility
While subletting may seem like the more flexible option as opposed to a regular lease with the landlord this is not always the case. You will still need to estimate how much space you will need for many years to come before signing a precarious lease with the sub-landlord. If you suddenly need to expand or downsize you are stuck in the lease with the sub-landlord and this could adversely affect the growth or success of your business.
Lack of Up-To-Date Technology
Up-to-date technology is a must in today’s business world. Without it you can, at best, seriously stunt the growth of your company or, at worst, set your business up to fail. Is there anyone to manage the phone lines or the IT network? Will it be secure? These are important considerations before you decide to sublet.
Possible Hidden Costs
If you need any extras such as use of the copy room or mail room or if you need meeting rooms or a reception area they all may end up costing you extra. You’ll also most likely need to hire a receptionist and pay for any other extra needs that you have. All of these costs may seem minor but they add up quickly and can make subletting completely cost prohibitive.
Subletting can be a risky endeavor especially if you’re a new business or you’re looking to save money on expenses. A better option would be to consider virtual offices, shared office space and executive suites. There are many benefits of a virtual office or shared office space that can offer you the convenience of a long-term office space lease without the hassle or the cost-prohibitive price tag.