Do you own a commercial real estate? Are you listing it to sell it or to lease it out? Before putting your commercial property on a lease, you should make sure what type of lease you want to employ or deal with. The performance and your income will be based on the type of lease you’re going to use. You can choose from various different types of real estate leases however, you would need to first understand the rules and basic elements of each type and figure out which one would suit your needs in best possible way. Following are few of commercial real estate leases’ types.
Gross Lease
In gross lease, tenants need to pay rent including the expenses incurred in building operating costs. In other words, tenants will pay only rent and rest of the expenses will be bear by the landlord. Therefore, before opting for this kind of lease, you should analyze everything and your finances to make sure you would be able to maintain building operating costs. If you own an office or retail property then gross lease could be an ideal type of deal. You should look out for balance between the rent you are charging and outgoings that could occur in the future. In case, property is bit older then it’s obvious that the outgoings or the building operating costs will be higher than that of a new or recently constructed properties. Hence, before signing a gross lease you should check the condition of the building so that you can figure out how much outgoings might occur.
Net Lease
In layman’s language, in Net Lease tenant is responsible for basic rent in addition to percentage of insurance, maintenance and operating fees. However, net lease have been further divided into three categories: net lease, double net lease and triple net lease. Simple net lease, as we have already discussed tenant just need to pay some portion of expenses in addition to rent. In double net lease, tenants need to pay taxes and rates as defined in the lease however; they are also liable to pay the insurance premiums for the commercial real estate. If you’re opting for triple net lease, it will have all the characteristics of double net lease in addition to the liability of the tenants to pay costs of maintenance and repair of the property.
Ground or Land Lease
In this type of lease, tenant takes ground or vacant land on lease and builds property on it. When lease ends, all the improvements and infrastructure that have been made on the ground will become landowner’s property.
In case, you’re not sure what type of commercial property lease, you should go for; best way is to get in touch with some property management company. If you’re intending to buy property in Ohio, you should look out for reputed Ohio Property Management Company so that you can get professional advice and the experts working with the firm will assist you in nailing down the deal that would be best for you in every aspect.