Negotiate a discount for prepaying 12 month’s rent
Subject to having the available funds, prepaying 12 month’s rent in advance has the following benefits:
- A 5-10% discount on the years rent expense – this needs to be negotiated and agreed to by the landlord.
- Tax savings – reduced taxable income (and tax liability) in the financial year the 12-month prepayment was made.
- Access whether the business has available funds on hand to prepay 12 month’s rent, and whether this is the ‘optimum’ use the business capital.
- Negotiate a rental discount with the landlord for the prepayment.
- Ensure the agreed rental discount is evidenced in writing.