Posts Tagged ‘commercial tenant’

Are you somewhat confused by all the terms that real estate agents throw around like nothing?

Well don’t worry, I can assure you that you are in good company.

Lets get a few of the basics out of the way and then we can move on to some of the specifics.

One of the first things you have to understand is that there are several components to the overall rental rate that you ultimately end up paying. There is the rent that you pay the Landlord for the use of their space, but also as a commercial Tenant you will also pay for the following items; the maintenance of the overall building, the property taxes, building insurance and management of the property. (I know, I know, it doesn’t seem fair to be paying for the management and maintenance of someone else’s property, but that’s the real world, so get used to it!)

There are basically two types of rents that you will be quoted when searching for commercial space.

They are Gross rents and Net rents. They are two separate ends of the spectrum of what is included in the rent. Gross rent is an all in rent. A true Gross rent includes all of the above mentioned expenses (Property taxes, insurance, maintenance, management, utilities etc. etc.) and any other expense that might be particular to a specific property.

Net rent is a type of rent that includes nothing extra. Net rent is simply the amount that you are paying the Landlord for the right to use their space for a specified period of time. In a single tenanted property the Tenant simply pays for all additional expenses themselves. In multi tenanted properties such as office buildings or multi tenant retail malls the Net rent is commonly accompanied by Additional rent (Also called CAM/Tax which stands for Common Area and Maintenance plus Property Taxes).

The Additional rent covers the expenses mentioned above. The Additional rent is usually an estimated amount based on the previous years operating expenses. The total expenses for the property are added up and then divided by the rentable square footage of the building. The expenses are then allocated to each tenant proportionally to the amount of space that they have of the building. So if a building has 10,000 Sq Ft of rentable space, and a tenant has 1,000 Sq Ft retail store, then they would pay 10% of the total expenses. The Additional rent is quoted on a per Sq Ft basis as well.

In different parts of the country the rents may be quoted differently. In Winnipeg the rents quoted are usually quoted as a price per square foot per year. In other parts of the country they may be quoted as price per square foot per month. When in doubt, ask.

About the Author:

Harry Logan is a Commercial Realtor with RE/MAX executives realty in Winnipeg, Manitoba, Canada. Harry represents Buyer’s & Seller’s and Landlord’s & Tenant’s in all aspects of Commercial Real Estate including the Leasing and Sales of Retail Shopping Centers, Apartment Blocks, Investment & Income Producing Property, Industrial & Warehouse Space, Office Leasing and the Sale of Businesses.

He can be reached at 204-667-SOLD (7653) or through his website at http://www.WinnipegCommercial.com

This is not intended to be Legal or Tax advice. Please discuss these ideas with a competent advisor.

Author: Harry Logan
Article Source: EzineArticles.com
Electric Pressure Cooker

If you are in residential real estate investment, do you experience the problem of complaints from your tenant like leading roofs or water seepage or even like noisy neighbours. However, majority real estate players choose residential than commercial of industrial. This is because commercial or industrial real estate investment seems like an unknown ground to the mass.

There are many advantages in commercial or industrial real estate investment.

Industrial or Commercial real estate have higher rental yield.
For example, if you purchase a shop space, the rental return depends directly on the human traffic. If you invest in the right shop space, your rate of return is much higher than a same cost residential property.
Also, most business owners when taking up the unit will know the human traffic flow and it just automatically justifying the high monthly rental. Compare to residential property, there are many alternative within the same vicinity, which can cause a price war in rental price.

commercial property improvement
Industrial or commercial tenant usually used the property differently from residential tenant with not much emotion attached. The tenants normally fix up small defect so that he can run his business. They will even add in improvement such as adding in telephone line, local area network hardware, changing the quality of the main door to look good for their customers. Adding in office partitions and rooms will also help you to rent out the property to other business owners when the current one left.

Collecting of monthly rent
When deciding which tenant to rent out for your commercial property, checking the credential of the company will give you a peace of mind. For factory owner, you will have a high chance of getting business tenant of good track record. With a good credential, you will have the peace of mind when collecting the rental. Many corporate tenant disperse the monthly rental to the landlord as part of their accounting procedure. For residential real estaet, such procedure is seldom set as it depend on the individual tenant.

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