Leasing Commercial Property
i hope this is the correct forum - the lease forum seemed to be all about lease/options on residential.
anyways, i need to find an agent (may have one) to lease an office building i just inherited.
i wanted to read about at least the basics of things i should look out for, with both the lease agreement with the broker, and the lease agreement with the tenant.
with one particular broker, i would be paying 5% of the gross rent. i am assuming this includes managing the property ?
can anyone direct me to a site on the net where i could do some learning ? or some threads on this forum ?
thanks.
property is in sacramento, california
One thing you can check out on your own is State solicitation for building.
That is one of the side strategies that I use.
sorry, i am not familiar with that term. does that mean attempting to lease it to a govt agency ? from the floor plan, it looks perfect for 2 doctors and a reception area.
fdi,
On section 8 tennants, a land lord judgement for eviction and monetary damages will prevent the tennants from continuing in sec. 8 until judgment is satisfied.
Since they are already out, you need to talk top HUD to see if this would still be a viable option.
Jim
Seems somewhat useful- problem is that the repairs and maintenance are pretty much guesswork. And it presumes that you are going to borrow the money now for the future repairs.
But running some numbers through it on a few of my properties, the results were pretty much in line with what I figure. I like it that it deducts future repairs and maintenance before figuring cash flow- not doing that is a common mistake when people discuss the cash flow on their properties.
Chris
Thanks for your feedback Chris.
Did you leave the 3, 5, 12 improvements at default? Also, what did you put in for maintenance?
Thanks for your help!
donny[ Edited by d_random on Date 01/30/2008 ]
The properties I tried had both been totaly rehabbed in the past year, so I figured on no repairs beyond maintenance for the first three years, $2000 at five years (one needs a new furnace eventually, the other I am woried about the sewer line), and $10,000 at twelve years. Every building is different, and these are essentially just guesses. Remember that these are bottom end homes that I have less than $60k total in.
For maintenance I put $250- the tenants take care of the yard and etc. and that pretty well reflects the reality I have experienced. Again, low end properties equals lower expectations.
I actually think the intent of the program is to input repairs you are doing now, with three, five, and twelve year depreciation schedules and capital improvements; then the maintenance cost is supposed to cover all the upkeep and there is no place for future replacements or major repairs. But I think the way I did it gives a more accurate picture, in spite of the presumption of borrowing money now for future repairs.
Chris
Try this link:
http://www.mass.gov/legis/laws/mgl/gl-186-toc.htm