As a landlord, it might seem like any property that you’re leasing follows pretty similar rules. This can be true for most private properties. There might be variations but for the most part, once you’ve rented out one property you’ve got a good idea what how to rent any others. Where things get a little more complicated is with renting out commercial properties. Leasing commercial properties comes with a whole host of extra considerations that need to be made. Not just by you but by your tenants as well. If you’re interested in leasing commercial properties, then there are a few things you can’t afford to forget.
Depending on the type of lease that you set up, the expectations and responsibilities shared between you and your tenants can change. Most commonly used is a net-lease. Net-leased properties allow tenants a lower base rent but put them in charge of handling the other charges such as tax and maintenance. This can make things much easier for you as a landlord as it takes a great deal of the burden off you. On the other hand, a gross lease will pay a higher case rent, but you will need to take care of the charges and potential maintenance of the property. It’s simply a matter of weighing up what you can afford and which will be more profitable in the long term.
The type of lease can shift a lot of responsibilities to the tenants. But no matter what lease you have set up there will be certain things that you must deal with. The safety of the property will very often be your responsibility. That includes the gas, electrical and fire safety of the property. The management of any asbestos in the property rests with the landlord and failure to correctly manage this can result in some hefty fines. You may also be called upon for maintenance of the property. A lot of indoor maintenance can be shared between you and the leaseholder. You may also be able to charge the leaseholder for any professional maintenance you have done on the property.
You will definitely need insurance on the property and sometimes on the business itself. Of course, the type of property that you’re leasing makes a difference on the type of insurance. But don’t forget that the type of business that’s using the property will affect the insurance as well. This isn’t just limited to building insurance. Landlord’s liability insurance and property owner’s liability insurance are among the many things that you’ll need to consider. Make sure that you do a good deal of research to find the best possible insurance policy.
Letting a commercial property can be a very profitable venture. You simple have to make sure that you’re following the exhaustive checklist of responsibilities that you have. That way you can ensure that you are covered in the event of a disaster, as well as making sure that you’re always operating legally.