The addition of any commercial property to your investment portfolio can be advantageous for many reasons, chief among them the potential for a stable cash flow or higher income. After all, you can draw up contracts with longer terms and collect higher rent rates from your tenants, whether they occupy retail or industrial space. A net lease, in particular, is considered the most landlord-friendly commercial lease type as it removes the financial responsibility for outgoings from the property owner and places it upon the lessee.
Before you decide to grow your investment portfolio with the acquisition of commercial property, however, you must first acquaint yourself with the various duties proper to a landlord as well as the obligations imposed upon tenants. Make sure you consider the property improvements or furnishings.
In general, you’ll want to own commercial property with remarkable features tenants will find irresistible. Retail tenants, for example, put a premium on kerb appeal, landscaping, and parking space, i.e. things that can help draw in potential customers.
Office interiors should also be adequately designed, maintained, and equipped. These days, it is a must for most offices to have modern amenities like energy-efficient heating and air conditioning, wall-to-wall carpeting, and provisions for high-speed internet.
The Landlord’s Roles
Among other things, you will be accountable for additional constructions and repairs, particularly if the investment property you are eyeing is not a newly developed one. You may also need to work on enhancing the building’s kerb appeal for marketing purposes to attract desirable tenants and even justify rent increases.
The Tenant’s Responsibilities
Tenants, on the other hand, have a duty to manage the rest of the remodels or repairs. You can also require tenants to inform you, within a certain timeframe, about any damages they spot in the building or whenever they wish to undertake any renovation works. The important thing is to make sure the rights and responsibilities of every party involved are outlined in the lease agreement.
Commercial properties for lease can be lucrative additions to your existing stable of assets. You may find out before long, however, that keeping such a property profitable may prove taxing in terms of both your time and resources. Fortunately, you can trust a property specialist such as Brett Halvorson & Associates to oversee day-to-day property management tasks and manage tenant relationships on your behalf.
Pros & cons: Investing in commercial property, realcommercial.com.au
Rental agreements, Government of Western Australia Department of Commerce
Office must-haves, realcommercial.com.au