How Do You Calculate A Business Lease?
Calculating the total cost of a business lease is an exercise in careful reading and basic math. Though many leases are straightforward, some will contain escalators, triple net fees and other costs that make the lease more expensive that it seems at first glance. Understanding the total cost of your lease is vital to forecasting expenses, and therefore profits, for your business. Note the “term” of your lease. The “term” is the number of months the lease will commit you to. Note any “escalators” in the lease. An “escalator” is an automatic increase in the lease payment after a certain period. If your lease includes escalators, it’s easiest to calculate if you subdivide the lease into the different price periods. For example, a 36-month lease with an escalation every year would be calculated as three 12-month leases at different prices. Note the monthly payment for each price period. Multiply the lease payment by the number of months to determine the base lease cost. Note any extra cha
