Zero security deposit and key money? Why renting an office is more cost-effective than renting an office

• Update:2023/11/14

When you start your own business, you will need a space to serve as your office. Until now, it has been common to lease office space, but in recent years, serviced offices have been attracting a lot of attention.

Serviced offices are more cost-effective than regular serviced offices and are superior in terms of cost. But how exactly is it cost-effective? In this article, we will introduce the reasons why renting an office is superior in terms of cost.

Serviced offices don’t require a security deposit or key money!

Basically, when renting an office space, most properties require a huge initial cost such as a security deposit and key money. However, many serviced offices offer reasonable or free security deposits and key money, making it possible to greatly reduce costs.

Inevitably, many serviced offices require you to prepare a security deposit and key money equivalent to six months to a year’s rent, so you need to prepare a lot of money in advance. Therefore, it is difficult to rent an office if you do not have sufficient funds yet. Especially if you have just started your business, renting an office is risky because most of the time you are not sure if your business will be stable.

This is where we recommend renting an office. Since there is almost no security deposit or key money, the initial cost can be greatly reduced. Some of the offices located near major train stations in Tokyo do not require a security deposit or key money.

Thorough cost comparison between renting and leasing offices!

The next section will provide a specific comparison of the cost aspects of renting and leasing office space. There are three main differences between the two.

1. Serviced offices have low monthly rent

For example, many serviced offices in Tokyo cost several hundred thousand yen a month in rent, and there are few properties that cost less than 100,000 yen. However, there are plenty of serviced offices in Tokyo for less than 100,000 yen, including some for as little as 30,000 yen to 50,000 yen. Therefore, monthly costs for renting an office can be less than half of those for renting an office.

2. Serviced offices can reduce initial costs

For a leased office, initial expenses such as a security deposit and key money, which are equivalent to six to twelve months’ rent, are required. In addition, the purchase of office furniture and office equipment, as well as interior construction work, will also add to the cost.

However, some serviced offices do not charge any renewal or restoration fees. This reduces the burden of renewal and move-out costs.

3. Some have zero renewal or restoration fees

For serviced office space, there is a renewal fee when renewing the contract and a restoration fee when vacating the space. The renewal fee is roughly equivalent to one month’s rent, and the restoration fee is approximately 30,000 yen per tsubo. This is a large burden for users.

However, some serviced offices do not charge any renewal or restoration fees. This reduces the burden of renewal and move-out costs.

No need to go through all the formalities when moving out of your office!

Serviced offices and leased offices have different types of contracts. Basically, a leased office is leased under a real estate lease contract. This real estate lease contract is subject to the Land and Building Lease Law and the obligation to restore the property to its original condition, so when moving out, interior work and complicated cancellation procedures must be completed, and the move-out procedure itself is complicated and difficult.

In contrast, serviced office space is generally leased under a service use contract or facility use contract. Therefore, the Land and Building Lease Law and the obligation to restore the space to its original condition do not apply in most cases. Therefore, interior work is not required and the cancellation procedure is relatively simple, allowing you to move out smoothly.

The minute I want to move out of my serviced office, I can!

In addition, many serviced offices require the lessor to be notified up to six months prior to moving out due to interior work and various other procedures. Therefore, even if you want to move out, you cannot do so immediately.

On the other hand, with serviced offices, there are almost no complicated procedures, and in many cases, you can move out by contacting the landlord one month prior to moving out. Therefore, it is very convenient because you can leave immediately depending on the situation.

Summary

Have we explained why renting an office is superior to renting an office?
In many cases, serviced offices do not require a security deposit or key money, so the initial cost can be greatly reduced, and the monthly rent is also lower. This makes them more cost-effective than renting an office. The fact that you can move out smoothly is also an attractive feature. If you are a new business owner looking to set up an office, please consider renting an office.

If you are looking for a serviced office in Tokyo, please consider Tensho Office. The only initial costs are the entrance contract fee and the first month’s rent. There is no brokerage fee, security deposit, key money, or security deposit. If you are considering renting an office, please feel free to contact us.