When you own commercial property or retail property in Brisbane or Queensland, the leases that reflect the tenancy mix are the foundation of the cash flow. In many respects it is the cash flow that attracts other investors to the property when a sale is forecast.
Then when it comes to selling that property it is the leases and the cash flow that will drive buyer interest and ultimately assist in getting a better price for the property. So, the best idea is to negotiate your leases carefully with due regard to the future of the property and your investment targets. Ask plenty of questions.
What About the Tenants?
Another thing to remember here is that not all tenants are good tenants. You must look at a tenant comprehensively before the lease transaction is accepted. The things to review with a tenant occupancy include:
- Where they are coming from
- Lease history from other locations
- Landlord comment from other locations
- The tenant’s ability to pay the rent for the long term
- The existing cash flow from the property
- The incentive that the tenant is looking for
A property with a good lease profile will create property investor interest; it’s that simple. It then stands to reason that the lease negotiations that occur in your property should be carefully planned and optimised. You never know when you want to sell or refinance your property. The leases that you have in existence will be the attraction to support your marketing processes and investment needs.
Look at the Leases and the Overall Tenant Mix
So, what can you do here as a property investor? Look at all your leases and the broader tenant mix. Set some rules and standards about these things below and then see a good solicitor to help you with the lease creation:
- Rent review timings and standards
- Option terms
- Make good provisions
- Lease terms and conditions
- Ideal tenant type and operations
When you make every lease count, the property starts to take on a whole new level of performance in its asset class.