If you're a property owner and you want to give your commercial property for rent than you have come to the right place. In this blog we will show you how to give your commercial property for rent. We will provide the best tips and tricks on how to successfully rent a property, simple steps on how to find tenants, and many more things that are related with commercial real estate.
Steps To Give a Property For Rent:
Find a good tenant
The first step to renting out your commercial property for rent is to find a good tenant. A good tenant should be a person who will pay you on time and take care of the property. While searching for a tenant, try to find one that wants to rent the place on a long term basis. The chances of getting a good tenant is higher if the tenant is looking to rent your property for a year or more. If you are not sure about how to find tenants, then you can contact a broker or a commercial real estate agency.
Screening Process
When you have found a tenant, go through their background carefully. Screening is one of the most important factors that determine whether a tenant is good or bad. You should run a background check on each and every person who wants to rent your property. Make sure you check their employment status, credit report, criminal history, and if they have any evictions in their past. You can get this information through their credit history. When you have their background and employment details, you can now proceed to the next step.
Start negotiations on the terms and conditions
After you have found a good tenant for your commercial property for rent, then you can start negotiating on the terms and conditions of leasing. This is the most important part because this will determine how much you will be getting as rent and other fees and charges that are to be paid by the tenant. A good tenant will always ask for a good deal and they know what they are supposed to pay. Before starting negotiations, make sure you have a lease agreement ready with all the details included.
Here are some of the basic things that should be included in the lease agreement:
- Address of the property
- Duration of lease ( one year, two years or more)
- Amount of rent and due date for payment. (It is advisable to set up auto payment system)
- Security deposit amount. (Make sure you hold it in a separate bank account)
- Who will pay utility bills? (usually tenants are liable for utility bills but make sure to include it in the lease agreement).
- Do you want the tenant to make any repairs on the property? (Some landlords prefer to do it themselves)
- When does the lease start?
- What are the terms of renewing or extending the lease. (Is there an option for renewal? If so how many times can this be done).
Now that you have all the details including the demand and costs, you can now start negotiations. You should start with the maximum price that you want to get as rent and then agree to the tenant's demand. In some cases, you can choose to either accept or reject the offer but consult a real estate broker before doing so.
Sign the deal
After the negotiation, it is now time to sign the deal. Make sure that you have all the documents ready before you sign any deals. Ensure that you have the tenant's and your signature in the lease. Never sign a deal with a tenant who is not ready to sign a deal. Remember to get at least one witness when signing the deal so that you can avoid any cases of fraud.
Lease registration
After paying the registration fees and stamp duty, you must register your lease agreement. Tenants pay both of these costs based on market prices in each location. Both charges are decided by local area subregistrars. If you have a services or amenities agreement with your renter, no registration or stamp fee is required. You may sign the leasing agreement with stamp franking paper of INR 100 or higher.
Aside from that, you must continue to collect rent on time and handle all maintenance issues. You will also be responsible for collecting and depositing TDS and other taxes, as well as dealing with all tenant concerns and requests and inspecting the commercial property on a regular basis. Another action that you will need to conduct on a regular basis is agreement renewal.
Key aspects worth noting
Now that you have successfully rented a commercial property, here are some important aspects that you need to be aware of:
- Is the commercial real estate lease inclusive of all common spaces, restrooms, hallways, corridors, elevators, and basements? Make certain that the deed specifies the full area leased to the renter. Make certain that the real location is given (in square feet).
- As a security deposit, a fixed amount is required. The landlord normally maintains three or six months' rent in a separate account for the life of the contract. The terms and conditions should state when landlords can deduct money from this deposit.
- You will need official approval from the lender or financial institution if you are leasing any mortgaged commercial property or a property purchased on loan.
- While a lease agreement is being negotiated, you should meet down with the tenant and agree on the conditions that allow for rent withholding. There might be restrictions such as the landlord not doing any maintenance or repairs within a certain time frame or other legal infractions. Examine any such provision carefully.
- Check the requirements of Force Majeure agreements carefully. Force Majeure refers to any unanticipated event or Act of God, such as a national tragedy or epidemic. These provisions often allow renters to avoid paying rent for specified periods of time.
Final words
When you've successfully leased your commercial property in panchkula, it's time to be happy. However, you have a lot more work to do. You must continue to monitor the property and ensure that all your tenants are paying their rent on time. If they are not paying rent, you can start the eviction process right away. In some cases, you might have to take legal action in order to get back what is rightfully yours.
