Sometimes, the concept of industrial space rentals may not be simple enough for a layperson to comprehend. In worst scenarios, some commercial property offers are just plain deception and can take advantage of customers who do not have a clue about anything with regard to calculation of warehouse rental cost.
A warehouse is important because it commercially provides storage for goods of manufacturers, wholesalers, importers, exporters as well as transport businesses. In warehouses, you will find loading docks that load and unload goods from trucks. All these operations are paramount for the storage of goods.
However, many still might come up with the wrong figures when it comes to pricing with respect to services and amenities. The following will break down the essential elements that contribute to cost calculation before determining the final rental cost for a warehouse storage facility.
Quoting of base rent per square foot
Well, this simple task works with proportion. If you have small volume of goods, you are definitely going to require small storage space for the goods. If on the other hand you have a large volume of goods, you will require more storage space to accommodate the large quantity goods. As far as cost is concerned, you will pay less for small storage space and pay a lot for big storage space. Whenever you get a quote from a warehouse facility, walk around and fish for other quotes for comparison to see if there is a wide gap or a slight difference. Cost of warehouse storage facilities with regard to square foot is one of the crucial elements that will add up to your overall cost.
Proportionate share of property taxes
Each year, local tax authorities asses the tax of property and eventually revise them. Therefore, different warehousing buildings will be taxed after being assessed varyingly. In some cases, the tax of warehouse buildings may not go up while in some instances they may shoot up. Therefore, as an owner of a warehouse storage facility, you will definitely feel the pinch of tax increase because as it changes, it causes proportionate change in the overall cost of storage facility. Finding good warehouse facilities will earn you an opportunity with the supervising manager who will explain how prices vary annually what with tax changes.
Proportionate share of property insurance
The insurance costs will cause a change in the pricing. Just like in the proportionate share of property taxes, insurance rates tend to fluctuate periodically. In cases where the rates are down, you may get low prices for warehouse storage services. However, when the rates are high it will be reflected in the ultimate price offered by a warehouse facility. Usually, storage facility prices will be high and you may have to settle for other options such as price negotiations or seek discount rates. Sometimes market demands may favor storage facility owners especially in cases where the demand for warehouse storage facility is low. In such a case, you are likely to get a discount or a fair price for the storage facility.
The Industrial Gross quote (IG)
Before occupation of warehouse storage facility, you have to consider this quote as it provides the most accurate basis for comparing storage costs for different warehouse facilities. The quote significantly includes base rent, property taxes and insurance among other essential considerations. Additionally, the quoting is based on square footage done annually making it an effective way of rendering the most complete analysis of warehouse storage cost.
This type of quote factors the base rent for every square foot annually. In this manner of quoting, it is imperative to determine the additional expenses in connection to taxes and insurance to make the comparison task easy and fruitful. On a rough estimation, the costs associated with this type of quote may accumulate to 30% of the warehouse occupancy costs.
There are other reasons that generally contribute to the final price of a warehouse facility. Some of them include security personnel and system cost, maintenance cost, loading docks and cranes cost, staff cost, utilities and anything else that adds to the expense of warehouse management. When all these expense are added together, they will determine the final pricing for each storage facility in a warehouse facility. The prices often undergo revision if there is a change in any of these factors that may have a positive or negative impact.
The next time you go around warehouse properties for sale in Toronto fishing for quotes, you will have a basic idea of how the costs can accumulate. It is often advisable to negotiate prices especially when you find a good warehouse facility. Talking to the supervising manager to some extent can secure a discount price for you. Do not fall victim to false or unfair warehouse quotes again! With this simple breakdown in mind, you can approximate the cost for a warehouse storage facility more accurately.