How to Make Every Lease Count in Investment Property in Brisbane

money on table

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.

city building high rise
Look at Your Investment Property Comprehensively

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.

building entranceway
Attract your tenants to your property with optimized leases.

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:

  • Rentals
  • 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.

The Advantage of a High Quality Lease in an Investment Property

retail shopping mall

So many landlords today in Brisbane and in Queensland negotiate a lease agreement with a tenant and do not think deeply about the elements of any lease to be created.  They just leave the lease to their property solicitor to formulate. 

Certainly solicitors know what to do in creating a lease, it’s just that they do not always know much about the property in question.  More often than not, the solicitors working on the lease documentation will have not seen the property at all.  That then leaves the opportunity wide open for a lease document to be prepared that does not specifically match the uniqueness of the property.

woman checking fruit in shop

Retail Properties are Different

When leasing office or industrial property the terms of a lease can be fairly standard, but when it comes to retail property the lease should be specially structured for the investment plans of the landlord and the function of the property. 

Retail property is very much a vibrant and active type of investment.  Things can happen at any time involving tenants, landlord, or customers.  That is where a good property solicitor will review the lease, match it to the needs of the property, and then balance that with the investment plans of the landlord.  Proof of this fact is that most large properties will have a special lease formulated by the solicitor acting on behalf of the landlord.