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This episode is a business coaching course that explains the cost of occupancy.

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Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Lesson Nugget: The cost of occupancy encompasses all of the costs that the tenant would be responsible for.
  • Jargonization Translation: CAM, or common area maintenance, is mainly composed of maintenance fees for work performed on the common area of a property.
  • Cost Of Occupancy: Expenditures that are required to assume and maintain occupancy of a space. Such expenditures include rent and/or mortgage payments, and recurring costs, such as real estate taxes, repairs, operating expenses, and other outgoings directly resulting from the use of the property. - Encyclopedia of Real Estate Terms 2nd Edition

cost of occupancy video like digital tutors, alternative to lynda.com

-All right, today, my friends, my Thrive friends, we are joined here today with Michael-- there is no real estate topic too obscure-- Burer, off the southern coast of San Diego, California. And we are on Thrive15, analternative to lynda.com, talking about this topic that's near and dear to my heart. It is the cost of occupancy. Now I'm going to read the definition. And he's going to tell you what it means. So here we go.

"Expenditures that are required to assume and maintain occupancy of a space. Such expenditures include rent or mortgage payments, and recurring costs such as real estate taxes, repairs, operating expenses and other outgoings directory resulting from the use of the property."

What is the cost of occupancy? What does that mean?

-So as a tenant, this is what you really want to know when you're evaluating whether you rent a space or not. What is it going to cost me to be in this building? It may not be just your rent, but it could also include electricity, cam charges that the landlord would charge you. So in some buildings the tenant may be responsible for that. In other buildings, the landlord may be responsible for these costs.

So it's important to understand when you compare locations, what is my total occupancy cost? What's the total cost to be in this space?

-This is something I think a lot of business owners get in trouble with, because they don't actually think about the true costs. They're thinking about just, well, was the blue sky cost? Oh, it looks like it's going to be very little. They don't think about all the things that could add up. What are some ways where you see business owners, or people who lease space, where they sometimes forget to add in certain costs?

-So they may not factor in cam charges that may come at the end of the year.

-Common area maintenance.

-Common area maintenance charges. They may not include electricity, would be a common one; the cost to clean the space; or repairs and maintenance. Maybe under your lease you're responsible for HVAC replacements, air conditioning replacements. Those can add up. So it's important to factor all of that in when you're evaluating a lease.

-I realize that I haven't been outside in about a year, so I can't open my eyes. And I apologize. I can still see you, but even though I can't see as well-- so I kind of have to, I'm kind of squinting a little bit-- I do sense your appreciation of this moment. I can sense that you can even feel my sense of appreciation for you at this very moment.

-I feel it, like a petting zoo.



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