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Top Reasons To Choose Commercial Property Over Residential Property

Residential properties have their appeal. In fact, the one you own now is something you can rent out to a tenant later. The same is true though when you consider investing in commercial buildings instead. These ones can offer a wide array of options for you and your tenants too. For those of you wanting to rent out your property investments later on, learn why commercial property is a better choice.

Commercial leases are easier to handle

What does this mean? Well, in the case of leases for residential property, you have to consider the fact that these are regulated by the government. The reason for this is simple. It is because of the fact that residences are homes people are used to living in and when one has to rent it out to another, considerable regulations have to be brought to mind to keep both parties safe. But with that heavy regulation, you can have a hard time getting tenants to occupy your residential space. Commercial leases, on the other hand, do not have that same tough regulation. This being said, you can always negotiate a good deal without sacrificing your protection. Tenants are also given more options with such properties.

It means continuing business with your tenants

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Commercial properties are often being used for business purposes. Since tenants invest a considerable amount of cash for that rented space and they also have to consider the location with which their own clients will do business with them, it will be less likely for you to encounter tenants who will live within a month’s or even a year’s time. In residential properties, tenants will most likely move for a lot of other reasons like settling down, or a change in jobs amongst others. Always remember though that as long as you get your tenants satisfied, you will definitely never lose them.

Commercial leases include a ratchet clause

Residential leases, as mentioned, are regulated by the government. With this, you can expect that it will not be easy on your part to make the rental fee go up whenever you want to. In the case of commercial leases, the ratchet clause allows you to increase your rent yearly depending on the percentage you have agreed upon with the tenant. The reason for that increase is agreeable on the part of your tenant simply because of the fact that the more they have run their business in your space, the more likely their business becomes established and attracts more consumers.

Tenants also pay for other things apart from the rent

This will include utility bill amongst others. There is also such a thing as Common Area Maintenance or CAM in some locations. This includes fees for trash removal, cleaning the space and the hallways of their rented areas and even restocking bathrooms. Often, this will include shovelling snow during winter. This fee can be charged to the tenant on a monthly basis. When the tenant agrees to pay the rent and all other expenses, the lease turns into Triple Net lease and can include fees such as insurance, real estate taxes and all other expenses included in the contract. Such type of lease is most common in large commercial properties o office spaces.

You give your tenants the opportunity to grow their business the right way

Many residential tenants will go for properties that are already in good condition which makes them ready to move in at any time. In the case of commercial spaces, tenants are expected to make a fit out which allows them to make changes that will fit the specific needs of their business. The fit out commonly includes freshening up the space and painting the walls and all other spaces that need painting. Depending on the needs of the tenant, additional equipment can be included. All of these inclusions will work for the benefit of tenants. This will make them grow their business the right way.

There is also such a thing as exclusivity

This can benefit both the tenants and you as the landlord. The exclusivity can include clauses as to who will be allowed to rent the other spaces around the one that has been rented to a particular tenant. This will give your tenants a better way to see to it that their business is protected and that there is a better chance for them to grow their business if they choose to rent a space from you. In that same manner, you as the landlord can specifically state in the agreement that once your tenant decides to vacate your space, they cannot open any store within a specific radius near your commercial property.

There are indeed a lot of great reasons to choose commercial property over residential property. Take note that these reasons offer benefits for you and your tenant. With this in mind, you might as well want to look for commercial real estate in Markham. We can help you locate the right property to invest in.

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