If you're thinking of leasing commercial property in the Gold Coast, make sure you know what you're jumping into before you make any financial investments. It pays to research your market, know your legal responsibilities and understand what's involved in commercial property management.
Here's what you should know before you become a commercial landlord.
A commercial lease can be much lengthier than a residential one, and both sides may want specific clauses added depending on their type of business.
Given the varied use of some commercial spaces, making the interior fit for purpose every time a new tenancy begins is an extensive process with significant costs. In the commercial world, maintenance and interior are often down to the tenant to look after, but the outside of the building falls to the landlord. When you put together your first commercial lease, decide what costs you're happy to deal with and ensure that your expectations are clearly laid out.
Sit down with a qualified legal professional to make sure that the terms and conditions of the lease work for you.
Your legal responsibilities don't end with the terms of your lease. Commercial landlords are required to ensure adequate building insurance is in place, and that the premises meets health and safety standards. It's worth familiarising yourself with the requirements before you lease a space and remedying any problems immediately.
To avoid lengthy periods without any rental income, research where to find future tenants quickly. Advertising a space is costly, so you want to minimise the number of publications you work with and how long you have to commit to. Finding out where potential tenants look for premises in advance will make the process much faster.
You'll also see what information to include in the advert, such as photographs and measurements, which takes time to get together.
Work out how you are going to manage tenants before you start to engage with them. Do you have the time to deal with any issues that arise yourself, or should you involve a property management company? While the latter incurs costs, it may save inadvertently leasing to a nightmare tenant who proves expensive in the long run.
A property manager will find and vet potential tenants, warn you of any red flags, and negotiate on the terms of the agreement. Once your tenants take possession of the property your manager will deal with collecting rent, chasing arrears and resolving day-to-day issues.
Do your research before buying a property and assuming you can lease it out. As well as looking at what the average rents are in the area, find out what vacancy rates are like, and the recent history of the market. Look at properties across the region in case you're missing a lucrative location for your type of premises and consider local plans for the future such as infrastructure upgrades. A new rail link, for example, can increase the commercial value of an area quickly by making it more accessible, so it pays to get in before the prices go up.
When looking around the region be careful not to be swayed by something irrelevant to your type of property though – a beach front location is great for a new cafe, but of little value to a warehouse facility.
If you're considering commercial property leasing, talk to Ray White Surfers Paradise about the management options we offer. Let us do the hard work so you don't have to.