Hi all,
I was wondering if anyone could give me some valauble information on commercial property investing. What do I need to be asking in order to be cautious? I’ve heard in some cases, the tenants are responsible for the payment of extras such as water rates, land rates etc etc. Is this true?[nice]
somethingfishi
In a commercial property the tenant may be responsible for paymnet of some or all of the outgoings eg rates, insurance, etc etc if the lease provides for this. If the lease is silent, then the tenant is only responsible for rent.
If you are buying an existing premises that is currently tenanted then you will need to see the lease to see what the tenant pays for. Note particularly the length of time left on the lease. Remember that an option is simply that, it is an option for the tenant to continue the lease for an additional period or periods. So if you’re buying a property with a 3 x 3 lease which is 2 years into the first three years, you only have a guaranteed tenant for 12 months until the tenant exercises the option to renew.
Therefore, is the building going to be easy to let if the tenant shifts out. Can it be used by different kinds of businesses.
You should also note that sometimes when negotiating with a tenant, particularly if there is competition, a contribution by the landlord to fitout and/or a rent free period might be part of the negotiations.
Some states might have laws about some kinds of commercial property eg NSW has or had something on Retail Tenancies.
Commercial property can be good but one of the reasons you get a higher return is because it can be riskier than residential
Hi There,A good start would be to buy the book “How investing in commercial property really works”.Cheers.
Turn your computer into a high profit centre with the amazing ABC automated system.
Test drive it here.
http://www.growyourwealth.info
You must be logged in to reply to this topic. If you don't have an account, you can register here.
