Whether you own a commercial space that you lease to businesses, or a residential property rented out by individuals, one of the biggest considerations you have to keep in mind is how much you will charge tenants each month.
The following considerations are all important to keep in mind when trying to decide how much to charge for rent:
When it comes to commercial properties, you likely have a lot of options for charging rent. Most often, the number is calculated by the square footage of the space (and that number can change based on a lot of factors, including what kind of business is operating there). Some landlords also charge a percentage of the company's revenues, often above and beyond a lower baseline price.
With residential properties, rent is more often just based on demand and square footage.
Finding a good rent price is all about finding that nice middle ground between what the market will bear and what helps you get the strongest return on investment. Put another way, you can charge $3,000 a month for rent, but if almost no one will pay it, what good is that price? Finding something that ensures you have a good return on your investment and people will always want to occupy that space is a must.
One great way to do this is to put in the time to research similar properties in your area and see how those rents line up with your needs or expectations.
Finally, you don't have to commit yourself to one rent forever, nor should you. For instance, if you are able to pay off your loans over time, you might be able to get away with pricing a great property at the lower end of the spectrum, just to ensure it always has a tenant.
If you need guidance when it comes to navigating the complicated world of commercial real estate, Ray White Surfers Paradise is here to help. We can guide you through the sales process and give you all the advice you need as you expand your portfolio. Give us a call today to learn more.