If your business has more space than it needs and is looking to make extra cash, subletting space is a great option. If you sublet commercial property, you can make extra cash on unused office and commercial space.

By subletting space, you can help reduce your company's expenses. However, there are risks, so you should weigh your options carefully before your business takes on a renter. Make sure you:

1. Check your existing commercial lease to make sure that you have the right to sublet business space. You may need to work with your landlord.

2. View a sample sublet agreement before you create one yourself so that you know exactly what you need.

3. Consider working with a property manager or a Realtor to help you find the right renter.

Action Steps
The best contacts and resources to help you get it done

Advertise to sublet office space to the right person

The first step to sublet business space is to find potential renters. Whenever possible, try to steer clear of Realtors as they often want a commission based on the size of your sublet commercial space. Find places where you can advertise your space for a low-cost.

I recommend: You can advertise your sublet commercial space at Sublease.com and City Feet. Also, at the popular site Craigslist, you can advertise for free.

View a sample sublet agreement and create your own online

After you have your renter, you need to think about the terms and conditions you want on your sublet agreement. One of the best ways to research these contracts is to view sample copies and see what kind of terms and conditions are feasible on the agreements.

I recommend: Check out All Business for a sample sublet agreement and at DocStock and you can search for sample agreements based on your lease terms. You can create your own sublet agreement by using the templates at Law Depot or Law Guru.

Hire a lawyer to write your sublet agreement

If you are worried about creating your own sublet agreement, or would feel more comfortable with a professional's help, think about hiring a lawyer. A lawyer will take away the pressure of creating your own agreement.

I recommend: Find a good contract lawyer in your area. You can find one through FindLaw.com, Legal Match.com or Lawyers.com.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you sublet office space in your building, think of other ways you can work to save money. Perhaps the two businesses can share expenses such as leases for copiers, employee break room supplies, etc.
• •  Your company is always responsible for meeting the rent to your landlord on your sublet commercial property. If your renter is not paying, your company is still liable.
• •  Always do a credit check on your renters before subletting space. If they have a history of running out on the rent, you won't want them.

It certainly sounds good. Find another entrepreneur to share your space, and you’ll cut rent and overhead costs significantly. But there are risks in opening your business space to others, which means you need to research options carefully.

If you already rent office space, check your lease agreement to find out your rights to share or sublet. Then you’ll need a three-part strategy:

1. Use low-cost advertising to find potential customers
2. Get advice on documents you’ll need to complete the deal
3. Look for other money-saving benefits to share office equipment and supplies

Action Steps
The best contacts and resources to help you get it done

Use free resources

Web sites and electronic bulletin boards often offer free classified ads to list your office space.

I recommend: Place a notice on Craigslist, a popular online community where you can publish free classified ads for most cities nationwide.

Do targeted advertising

Some national Web sites for small business have extensive listings of office space to link prospective renters and landlords.

I recommend: Visit Offices2share or sublet to advertise short- and long-term office space. Users can check listings by Zip Code or city nationwide.

Get practical tips

Small business sites on the Internet can provide a wealth of tips on negotiating and managing your rental or sublet arrangement.

I recommend: Go to AllBusiness for a practical guide to office leases as well as help on realtors, rental terminology, renewals and facility improvements.

Find online legal advice

Tired of waiting for an appointment with a lawyer? Online services may help guide you in the sublet process.

I recommend: Go to LawDepot for a template of a commercial lease agreement and answers to common questions.

Locate specialized assistance

Want to share retail, industrial or warehouse space? You may need additional help to find a tenant and complete your transaction.

I recommend: Visit Officespaces, which lists separate online directories for general office space, executive suites, industrial and warehouse space and lists your ad for as little as 20 to 30 cents per day.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Check your lease agreement to make sure you have the right to sublease your space. You may need to negotiate such terms with your landlord.
• •  Try to find a new tenant yourself, since a real estate agent will seek commissions based on the size of the rental space.
• •  Consider hiring a lawyer to help draw up the paperwork for you.
• •  Check with professional groups to find tenants who may be complementary to your business.
• •  Try to share support staff, printers, copiers, fax machines and office supplies with your new tenant.

Subletting space is not a recommended venture for your business to undertake. However, it sometimes becomes necessary if you have to relocate in a hurry or realize you've rented more office space than you need.

Subletting space, for beginners, can be a complicated arrangement to figure out. Basically, your company rents the space from the building's owner and the holder of the sublease, in turn, rents from you. To make the process easier to understand and ensure you don't get ripped off, do the following before you sublet:

1. Learn more about the process of subletting and how it works.

2. Check out sample subleases so you know what language to use in your contracts.

3. Advertise to attract potential renters so you have a pool to choose from.

Action Steps
The best contacts and resources to help you get it done

Do your research before subletting space

Subletting space is not something you want to jump into blindly. You should do as much research as possible beforehand so you know what you're getting in to. Sometimes it is better to try to buy out of your rental contract than to go through the hassle of subletting.

I recommend: Go to the Officetimes and read the article on subleasing to learn about the options available to you. Then go to Hanley Wood's Remodeling Magazine website to find information on how to sublet just a portion of your office if you plan to keep part of the area for your company's operations.

Learn to write a contract for subletting space

The best way to keep those subletting space from you from taking advantage of your company is to write up a firm and binding contract. It's important to use appropriate language to make sure this is the case.

I recommend: Go to Docstoc and download the free template to start typing up your own contract with a sublessor. For an example of a sublease clause in an office lease, see LeasingProfessional.com. Any time you use templates, have a lawyer look over your finished product.

Start advertising that you are subletting space

You can't start subletting space until you have people interested in renting it from you. The only way to do that is to advertise. The best way to start is by spreading the word to business owners you already know. If that doesn't work, try promoting your space over the Web.

I recommend: Consider putting an ad up on Office2Share. It's targeted directly to the market you are trying to reach. Also check out BusinessNation, which offers a similar service.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Check the terms of your lease before you consider subletting space. For beginners, your landlord does not have to allow it.

With the high cost of commercial real estate, it's easy to see why a company or individual would think about subleasing, or subletting, space. Whether you're thinking about getting a sublet space or becoming a master tenant to rent out your extra space, it's helpful to understand a few key terms that are related to subletting. If you don't carefully read the lease, for example, you may be stuck in a year-long lease that doesn't have the permitted uses you need. Cover your tracks by learning these terms.

Action Steps
The best contacts and resources to help you get it done

Master tenant, subtenant and co-tenant

The master tenant is the person or company that originally rented the space, who in turn rents to the subtenant or co-tenant. The co-tenant deals directly with the landlord while a subtenant will only deal with the master tenant.

I recommend: The Housing Rights Committee of San Francisco explains the differences between the types of renters and explains your rights in some potentially confusing situations.

Permitted uses

Zoning laws restrict business owners from doing certain tasks in a space. For example, if the area is zoned for residential use only, you cannot conduct commercial business. This is important to know before signing your sublet agreement.

I recommend: The City of Raleigh is a good source for some examples of zoning restrictions and permitted uses for areas. Of course, check the laws of your own city before signing.

Holdover

The length of a sublet is usually one year. After that, if the subtenant or co-tenant decides to stay, it's called a holdover. Typically, a tenant in a holdover situation can vacate whenever they choose as long as they give a 30 or 60 day notice. Some agreements, however, assume that a holdover means another year-long commitment.

I recommend: LegalMatch describes a holdover.

Base rent and net rent

When subletting a commercial space, you are often responsible for paying rent on the space that you use, but also a portion of the rent for common areas. The base rent is the rent for only the space you use, typically listed per-square foot. The net rent is the total monthly rent for the space.

I recommend: Learn more about base and net rent from How to Lease Space in Shopping Centers by Barry Fleisher.

Inspection checklist

Before moving into the space, you should go through an inspection checklist with the landlord or master tenant. This is an agreement about the condition of the property upon move-in. If the property is not in the same condition when you leave, you will not receive your security deposit back.

I recommend: Scroll down to see a copy of an inspection checklist at the Internet Legal Research Group.

Landlord's Consent to Sublease

Before a master tenant can sublet space, the landlord must agree to it. They'll present a legal document called the Landlord's Consent to Sublease.

I recommend: 1040 Tools offers an example of a Landlord's Consent to Sublease.