When to raise the rent of your commercial property? The monthly rent of a commercial property usually depends on the prevailing rates of real estate in the industry. The range of rent charged is also governed by the location, assumed profitability, amenities and goodwill of the property. The landlord and the tenant register their acknowledgement of the rental rate when signing the lease. However, in due course, various factors come into play which might compel the landlord to think about raising the rent. A lease generally contains the provision to allow the landlord to raise the rent under a few valid circumstances.
Here are four circumstances which validate a rent raise When your tenant renews the lease repeatedly If the tenants renew the lease consecutively for a few years, it can be assumed that they are satisfied with their occupancy. This satisfaction can and should be harnessed further by raising the rent by a logically acceptable percentage. The landlord can also approach the tenants with the proposal of raising the rent and it is quite possible that tenant offers to pay an extra amount more than the landlord had expected.
Here are four circumstances which validate a rent raise When your expenses increase due to inflation Inflation has an impact on the costs incurred by the commercial property in question. You should include the increasing expenses on taxes and insurances in your yearly expense account and reconsider your profit margins. It is quite logical to discuss a raise in rent with your tenants over the issue of inflation.
Here are four circumstances which validate a rent raise When your neighborhood decides to raise the rent If the neighborhood of the commercial property is witnessing a raise in rents then the landlord must consider raising the rent to catch up with the prevailing rates. Property management services such as Madison management help keep track of rates in the city and neighborhood so that as a landlord you are never shortchanged on your property.
Here are four circumstances which validate a rent raise When you invest in enhancing the value of your property If the landlord decides to invest in enhancing certain amenities or introduce new services within the property premises, the commercial property certainly deserves a raise in rent. In other words, the rent of the property must represent its value. Good property management firms such as Madison property management continuously work to develop the commercial properties in their charge and the value addition must be appreciated with a rent raise.
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