The importance of real estate leases


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Of course the key to making lease option real estate investing work, is finding motivated sellers and buyers. Finding these motivated sellers and buyers shouldn't be difficult. The continuing down turn in the real estate market, has created a large number of sellers who can't sell their property and buyers who can't get financing to buy. The seller could possibly get a fair offer to be paid in the future, by selling their property to a real estate investor on a lease option basis. A potential tenant-buyer could obtain home ownership, without having to qualify through traditional home loan guidelines.

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The importance of real estate leases

  1. 1. The Importance of Real Estate Leases
  2. 2. • Leases are the foundation of property performance. The best salespeople understand the leasing process and the high value that it brings to the future sale. A good lease can enhance a sale price when the time comes. • The way that leases work for the property investor will solidly impact on the property and its performance for the duration of the lease. As you work with tenants or buyers for the property, the type of lease that applies will also impact on the negotiations. Let's look at the main lease types and expand on some of the most relevant issues for you.
  3. 3. • When it comes to leasing a property and particularly a retail property, the tenant mix process will be very important. This then says that the single tenant lease should be matched to the surrounding tenants in the greater property. That is how you build 'clusters' of tenants and strengthen the market rent for the landlord. • If you are going to look for some of the leasing business in the local area, choose the best properties to work on and the quality clients to work for. There is a real reason for this. Small and single properties are usually very 'hard work' to lease. If the base rent is small, your fee for a successful transaction will also be small. Focus your leasing effort on quality properties with good fee potential.
  4. 4. • Negotiating a commercial real estate lease needn't be a battle. Remember, and you shouldn't have to remind the landlord of this, that it is in both of your best interests that you are successful. If you lease on bad terms, you go out of business, and they have no tenant. In fact, many landlords now recognize that providing "superior tenant service" begins by making the lease negotiation process as simple and efficient for tenants as possible. • Bear in mind that oftentimes they are going to be paid by the landlord for filling the space. Building a relationship with your agent can be done, just as building a relationship with your banker, your realtor you bought your home with, or your advertising agent with communication. Ask around, ask other agents, ask the agent questions, leave nothing to question.
  5. 5. • Negotiation leverage between landlords and tenants has shifted tremendously throughout the last several decades; however, it is now a highly favorable market for businesses considering relocation. A surplus of office vacancies has paved the way for tenants to secure great lease terms and let's face it, due to the fierce competition in the marketplace, some landlords are offering financial incentives that are just plain hard to pass up. It's now possible for companies to get into a higher-grade office building in a better location at the same rental rate, or in some cases, an even a lower rate than their current building. However, change is