Base rent is only the starting point. Many tenants don’t discover their true occupancy costs until the first reconciliation statement arrives — and by then, it’s too late to renegotiate.
What Adds to Your Monthly Cost
- Property taxes
- Common area maintenance (CAM)
- Repairs and management fees
- Insurance
- Utilities
A Real-World Story
A small medical clinic budgeted carefully based on base rent. Six months later, they received a reconciliation showing higher-than-expected operating costs. Their monthly occupancy cost was nearly 40% higher than planned, squeezing cash flow.
How to Avoid This
- Request historical operating cost statements
- Ask for an “all-in” cost estimate
- Build a safety margin into your budget
Conclusion
Knowing your real monthly cost protects your cash flow and your peace of mind.
Written by Sav Cheema, Commercial Real Estate Advisor with RE/MAX Elevate, serving business owners, landlords, and investors across British Columbia, Canada.
Disclaimer: This blog is for general information purposes only and does not constitute legal, accounting, tax, or professional advice. Always consult qualified legal, accounting, and real estate professionals regarding your specific situation.
