Some Types of Commercial Property Leasing Agreements
Everyone is out there to make some extra money to combat chances of inflation or recession. With inconsistencies and markets on a constant up and down, there is a need to come up with ways that can guarantee additional and sustainable income. Business homeowners are in a very good position to make some much needed extra cash by leasing out their property for commercial purposes. Not only do you put vacant buildings to good use but you can also get true value for them.
However, in order to lease out property to a business, there are contracts that need to be drawn up detailing terms and conditions. A well planned rental will protect you – the homeowner – against any undesired event or effect. Some of the things that will have to be taken into consideration and discussed include no build areas, type of business the owner wants to lease out his property for and any alterations that the business can undertake on the property.
Meet and sit down with a trusted lawyer and draw up a contract or an agreement stating the terms and conditions that need to be fulfilled when leasing your property to commercial establishments. Also define what your role as a property owner will be during the life or period of the rental. What will your duties and obligations include and what aspects will you not be responsible for?
The commercial property leasing must be done with extra care and consideration. When negotiating, make sure you understand clearly whatever rules must apply. Negotiate in such a way that you get added value for your property. Remember, this is a business so do not let sentimentality or attachment with your property get in the way of business.
When choosing to lease commercial property, there are various types of leases one can go for. There is the gross lease, triple net lease and modified net lease, to name a few. Under gross lease, the landlord pays for maintenance, insurance and taxes out of the money collected from fixed rents. Under triple net lease, fixed rent is lower but tenants have no control over expense increase or maintenance. Under modified net lease, the landlord and the tenant split maintenance expenses and the latter pays insurance and taxes. A modified net lease is a popular form of lease agreement as it allows for flexibility and eases the cost of bearing expenses.
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