As a new commercial property owner, have you decided how much rent to charge for your commercial properties? Did you consider all pertinent factors while determining the rates? Most importantly, are you sure they're fair and not too low to cut profits or too high to put off renters?
If your answer to the last two questions is other than yes, it's time to conduct a commercial lease analysis. This can help assess the viability of the legally binding agreement you, as a landlord, will have with your tenants.
We'll dive into what you must look for in a commercial lease analysis, so read on.
Fair Rental Rates
Knowing the average commercial rental rate in Austin, TX, can help you determine how much to charge for yours. According to a 2022 second-quarter report, Class A and B office spaces in the city had an average full-service rental rate of $52.77 per square foot.
Those figures vary based on location, building class (A, B, or C), amenities, and lease length. The better the area, the higher the building class, and the more bells and whistles, the higher the rent can be.
If you're unsure about those factors, a commercial lease management company can help. They can perform a thorough analysis of your property, often for free.
Clear Landlord Terms and Conditions
A commercial lease establishes the terms and conditions for renting out your property. You must put all these key provisions into writing so prospective tenants know what they're getting into. Here are some examples of what your lease should describe:
- Rental rates and due dates
- Other fees you can legally charge
- Lease length
- Permitted business operations and tenant activities
- Grounds for eviction
Being explicit about the last two is vital to prevent renting out to the wrong tenants. If that happens, you might have to evict them at some point.
Evictions in Austin are lengthy, and filing costs a lot: over a hundred dollars per person named on the lease.
Explanation of Tenant Rights and Responsibilities
Your tenants have the right to a safe and secure environment. For example, they must have access to functional electrical, HVAC, and plumbing systems. It's also their right to ask you, their landlord, for property maintenance and repairs.
However, your tenants must follow the lease agreement's T&C to keep the premises safe and secure. For example, they must do their part in keeping it clean, sanitary, and free of environmental tobacco smoke.
So, when analyzing your commercial lease, ensure it explains all tenant rights and duties. Alternatively, you can hire a professional property manager to create, assess, and enforce the lease agreement.
Schedule a Comprehensive Commercial Lease Analysis Today
A commercial lease analysis, if done by an expert, should help you determine fair rental rates. It should also ensure your T&Cs are just and all tenant duties and rights are clear. Lastly, it should help you craft a contract that benefits you and your tenants.
If you're ready to let the pros handle your lease analysis, know that PMI Austin is at your service. You can count on our comprehensive leasing and property management services.
So, schedule your consultation and free rental property analysis with us today!