Investors in Brisbane today have a wide variety of options
when it comes to leases and how they will serve the property in an investment
sense. Importantly the lease that an
investor uses should be drafted by a solicitor of sound commercial property
experience. Brisbane is a thriving and
growing capital city on the eastern seaboard of Australia. Investments in property are a good thing.
It should be said that a lease of commercial or retail property is not just about the rent; it’s about occupancy, security, investment, improvement, and stability. When you have a tenant, then the lease takes over in the control sense to cover off on these issues.
Nothing is more troubling than a lease that has been drafted by someone with little local property knowledge and experience. The reality is a lease should be structured for the property, for the future, and for the location. Not all properties are the same and on that basis, no lease should be the same. Not all investors are the same from an investment perspective. This is where the variables of property use and occupancy become important, and the lease then takes over in the control sense.
A good property solicitor that is acting for a property investor should take into account not just the priorities of the client, but also the elements of the property that need special attention and control over time. From that point, they can structure a lease that really targets the issues for the property owner.
When it comes to selling your commercial or retail property, the buyers that you need are the ones that can act in today’s market and economy. To find the right buyers and bring them to your sale is a skill that only the best real estate agents can provide.
The Local Property Economy
Those agents know what the local economy and businesses are doing; it is that information that is valuable to you with your property challenge. Choose your agents with a questioning approach regards market awareness, property type coverage, and target market penetration.
So what is actually happening with investment properties in Brisbane now? There are still buyers out there that are looking for good investment property stock; that is something with a tenant mix, stability of cash flow, and future demand. Are you taking your property to the market soon in Brisbane?
Consider the facts and challenges around your property and what it is worth. If you were buying it today, what would you pay? Would you pay a ‘premium’ or would you look for a ‘bargain’. It sometimes pays to ask yourself those questions and put some reality into the real value that your property presents to any purchaser.
Let’s go back to the ‘agent question’. One of the most important elements of property
marketing today that an agent can bring to a seller is direct access to a
comprehensive database of qualified prospects.
That database list alone will help you fast track inspections, enquiry,
and the right type of property offers even in the earliest stages of the
Ask your agent if they have a database and a target market
to suit your real estate challenge. Ask
them how they are going to tap into it to help you with your property requirements
and investment outcomes.
When you sell a commercial investment property, the price you achieve is driven by the market. It is the buyers in the market that generate the interest and ultimately make the offer. Contrary to popular belief it is not the sellers or the real estate agents that set the final price.
What the sellers want for their property and what the agents think they can get are in reality an educated guess or wish based on market trends. The end price for a property is driven by the buyers in all cases. If a sale goes ahead it is because the buyers are willing to pay the money; sure the seller has to accept that price, but without a buyer making the offer, the price for a property is just a number.
Real estate agents offer real benefit to the sale process because they are working with buyers and tenants all the time. The database that an agent has is a huge source of opportunity when it comes to selling your property.
The bigger and better the database, the more exposure to qualified buyers your property will have. This massive exposure that some agents have to buyers is of great advantage to you when you want to sell the property.
At the time of putting your property on the market, find the
agent with the best and most up to date database; it will be a direct
reflection of their market penetration and territory domination. They are the agents that should sell your
property and they are the ones that will have an idea of what buyers are
willing to pay in the current prevailing economy. Make the right choice and get the best agent
to help you sell your property.
Property owners that lease commercial property to tenants should keep a close eye on the terms and conditions of their leases. It is all too common that a critical date or situation is overlooked in a lease and the landlord or property manager has to chase down and remedy the matter.
The key secret to keeping a commercial property on track is in understanding the leases and thoroughly actioning any date critical terms and conditions.
There are many things to look for but here are some of the
main ones to monitor:
Rent review dates
Option to renew dates
Lease expiry dates
Renovation date requirements
Insurance certificate of currency evidence
Charges for outgoings
Reconciliation of outgoings
Payments of sundry charges under the lease
Rent payment provisions
Turnover reporting to the landlord
First right of refusal provisions
The list can go on, but importantly the critical dates in a
lease are handled and controlled. In
this way the property can be optimised for the landlord and the tenant.
When it comes to marketing and selling your property, the
time you spend on tracking and checking critical dates is invaluable in the
When you own a commercial or retail property, it pays to
keep in close contact with your tenants.
They are a key part of the property performance and should be nurtured
to stabilise income from the property.
As part of keeping in contact with the tenants in your
property, you can create a tenant contact plan that formalises the meeting and
any feedback that may happen as a direct result. Many larger landlords in high performing
properties will create and hold tenant contact meetings with all tenants at
least every 90 days. In retail property
this cycle is shorter given that a retail property is a very active type of
So just what can and should you talk to your tenants
about? Try this list:
Need to expand premises
Need to contract premises
Maintenance needs in the property
Interaction with other tenants in the same
Exercise of lease option
Use of the building
End of lease issues
Renovation or refurbishment plans
Terms and conditions of their lease and
compliance to that
It is interesting to note that good tenants are constantly
being networked by other property owners and real estate agents in your local
area. All the more reason to keep in
contact with your own tenants to make sure they are happy in occupancy.
When you own commercial property or retail property, the
leases that reflect the tenancy mix are the foundation of the cash flow. Then when it comes to selling that property
it is the leases that will drive buyer interest and ultimately assist in
getting a better price for the property.
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 with the ‘end result’ in mind. You never know when you want to sell or refinance your property. The leases will be the attraction to support your processes and needs.
It can also be said that not all tenants are equal when it comes to investment performance. Ultimately you would want a mix of tenants that are not too ‘volatile’ in the daily events and operations of the property.
So, What Are Your Investment Systems?
So what can you do here as a property investor? Take a look at all your leases and the broader tenant mix. If you own a shopping centre or a large office tower with many tenants, think about creating a list of tenants and splitting them up into priorities and retention groups. It stands to reason that you may want to keep some of your tenants more than others. What can you do to negotiate leases with your ‘desireable tenants?’ Try a tenant retention plan for starters. That strategy should feature in your investment or property business plan. Understand the deals that you are prepared to do with your better tenants. That will include incentives, rents, and lease terms.
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
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.