Should I Rent or Lease Commercial Real Estate in Florida?

When it comes to commercial real estate in Florida, you have several different options that don’t include purchasing the property.

The first thing to know is the difference between a rent or a lease. Many people can use these interchangeably, but there are several differences – mostly in regard to time.

When you rent a property, an agreement usually lasts for 30 days. You can always renew after the 30 days has expired, according to the original agreement. The landlord who holds your rent may also require additional information and ask that you sign a lease.

A lease usually lasts for 12 months, but there are also options where you can lease for shorter periods – 6 months – or longer periods like 18 months or two years. Depending upon the contract you sign, the lease may be extended, otherwise it can expire and you’ll need to look for a new property.

Commercial leases are complicated and detailed, so it’s a good idea to find a corporate law firm in Miami or in other major Florida cities who can take care of the documentation and advise you on your rights and the final terms of the lease.

There are three different types of leases available in Florida in regard to commercial properties.

Full service leases require you to pay the rent month to month. These are the simplest types of leases.

A modified gross commercial lease also requires month to month payments, but you may also have to pay fees that might not be revealed up front. These can range from pest control to utilities and maintenance costs.

With a net commercial lease you and the landlord will split the costs of taxes, maintenance, and insurance. There are three different types of net commercial leases.

• Single Net Lease: you pay rent and property taxes.
• Double Net Lease: you pay the same as a single net, but also the cost of insurance.
• Triple Net Lease: you pay the same as the double net, but building costs are also your responsibility.

In Florida, commercial rents are handled differently. The first differentiator is a tax of 5.5% on your lease. The tax is calculated on multiple factors that include rent, common area maintenance, insurance and whatever is deemed a pass through expense.

When pricing rents, commercial real estate firms will base the cost on location, the size of the actual property, and other factors.

With a commercial rent, there will be other financial considerations, including maintenance fees, taxes and insurance premiums you will need to pay. 

Other factors include:

• When the rental payment is due to the landlord
• Incentives to sign, such as first month free
• Safety and security deposits

Come to Murphy

Renting or leasing commercial property in Florida can be a complex decision, but when you work with Murphy Business Sales, we can offer advice and help you navigate the process.

 If you’re thinking about leasing or renting, and want to work with professionals, contact Murphy Business Sales today.