commercial rent deposit.

deadramones

I'm looking into renting a unit from a well known Dublin landlord. He's asking for 25% of the yearly rent as a deposit. Is this normal, it seems excessive?

unhappycamper

deadramones wrote: »

I'm looking into renting a unit from a well known Dublin landlord. He's asking for 25% of the yearly rent as a deposit. Is this normal, it seems excessive?

It depends on the location, if it is a prime location your landlord most likely wants to be certain that if you do fold he will make a decent bit of cash out of you but to answer your question yes it does seem very unreasonable.

deadramones

apparently he wanted 4 months initially but my business partner talked him down to three. We are a start-up but I just feel with the financial climate the way it is this is excessive. Any advice on how to approach it with the landlord?

Southsider1

Yes! Explain to him that if he looks on DAFT.IE there's over two thousand commercial properties to lease as of 4.45pm today, so he needs to cop on and be glad he has someone to lease his premises. He should be looking for a month in advance and one month rent as deposit. You should really be pushing him for a rent free period while you get fitted out/set up. I recently negotiated a three month rent free period for a client. And the Landlord had no problem at all. In fact he was glad to find a tenant. You and your partner should also shop around as it's very definitely a buyer's/tenant's market at the moment and there are many many commercial properties empty in every city, town and village in Ireland. The fact that the landlord owes mega bucks on his mortgage is his problem not yours!

Lloyd Xmas

Southsider1 wrote: »

Yes! Explain to him that if he looks on DAFT.IE there's over two thousand commercial properties to lease as of 4.45pm today, so he needs to cop on and be glad he has someone to lease his premises. He should be looking for a month in advance and one month rent as deposit. You should really be pushing him for a rent free period while you get fitted out/set up. I recently negotiated a three month rent free period for a client. And the Landlord had no problem at all. In fact he was glad to find a tenant. You and your partner should also shop around as it's very definitely a buyer's/tenant's market at the moment and there are many many commercial properties empty in every city, town and village in Ireland. The fact that the landlord owes mega bucks on his mortgage is his problem not yours!

Well said; this is exactly how it should be done.

thephantom

It all depends on bargaining power, the landlord will want as much security as he can get and you as a tenant will want to part with as little as possible.

3 years ago a 3 months security deposit was the norm however we are living in a completely different world now. Explain to the landlord that it is a new business and that you want to keep your set up capital to a minimum allowing you good cashflow for the year ahead. Alot of commercial landlords are accepting much lower deposits if any at all to attract tenants, in fact you will often see rent free periods been given.

91011

Another option is to give one months security + a personal guarantee capped at 25% of annual rent.

You should also manage to get rent payments to be monthly by direct debit rather than quarterly in advance.

Otherwise - as said above, there are hundreds of premises available.