How Much should You Charge for Your Commercial Rental?

Monthly rent for a commercial space is complicated to determine as several factors contribute to the overall rental price. As a landlord you want to ensure that you get the best rental price for your commercial property. However, a rental price for a commercial property that is too high can keep a property empty for months. In order to calculate the optimal rental price for your commercial property you need to understand its true value. Below are important variables that help you determine how much you should charge for your commercial rental property.

  • How much square feet is your rental? While this question may seem simple, some commercial landlords include thick walls in their square feet measurements. While this tactic can make your rental seem more desirable, tenants who believe they will be able to use all the advertised space can be turned off or frustrated by landlords that overestimate square feet measurements.

  • How much are you going to charge for common areas? Many commercial properties have shared common spaces like lobbies, parking lots and bathrooms. You want to make sure that you include these common areas when you calculate monthly rent for your commercial property as your tenants will be getting valuable use from them.

  • Include layout in your pricing: Commercial space that is laid out wide and open is generally worth more per square feet than space that includes awkward angles and narrow corridors.

  • Are you requiring that tenants pay for extras? In commercial leases landlords may ask tenants to cover operating expenses, insurance, maintenance and or real estate taxes. If you’re going to make tenants pay these extras than you should consider these added costs when calculating rent.

  • Are you charging percentage rent: Commercial landlords for retail property often require tenants to pay them a percentage of profit on top of monthly rent. If your planning on charging percentage rent you don’t want to flood your tenants with expensive monthly rent that won’t enable them to grow their business (e.g. by spending more on marketing and new inventory) which would me you would get less percentage rent in the long term.

Calculating monthly rent for commercial property is not an easy task. However, it is one of the many potentially difficult and time consuming tasks a landlord or property manager must complete. Using helps landlords and property managers take complicated and difficult tasks and organize them in a manner that saves time and money. Realty Information Systems has with essential property management features that will meet your needs.

This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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