There is no doubt in the fact that investing in the commercial real estate properties is very lucrative due to the handsome returns on investment. Among various ways to invest in commercial properties available to the investors, one of the most common way to invest is to lease out properties. However, there are certain hidden costs associated with these leases. Go through the slide to know the unknown costs associated with commercial leases.

1. UNKNOWN COSTS
ASSOCIATED WITH
COMMERCIAL LEASES

2. Investing in
commercial real
estate is one of the
best options for
people looking for
generating money.

3. One of the most
common ways for
investors investing in
the commercial real
estate sector is to
lease out properties.

4. However, most of the
time these investors
are not aware of the
hidden costs that are
associated with
commercial leases.

5. Here are details
about unknown
costs associated
with commercial
real estate leases.

6. Base rent
increases

7. Most of the time the
base rent you have
agreed to is typically
for the first year and
in succeeding years
your rent will be
increased.

8. Most of the time the
increase is in the area
of 3 percent to 4
percent, however, if
times are not robust,
then the owners will
negotiate a base rent
that doesn't increase
throughout the term.

9. Abated rent

10. If you are successful
in convincing your
landlord to concede
some months of base
rent as an incentive
for your tenancy, then
it is good for you.

11. However, if you are
unable to fulfill the
obligation for a full
term, then you might
be liable for
repayment of the
abated rent.

12. Operating
expenses

13. The commercial
property taxes,
insurance on the
building, maintenance
of the foundation, roof
and walls come under
the category of
operating expenses.

14. If you are a tenant,
then you are
responsible for paying
these expenses in
addition to your base
rent when you are
due.

15. Moreover, these
expenses increase
over the term of your
lease and owners have
the right to annually
pass on these
increases to you.

16. Common
area
maintenance

17. It is commonly
referred to as
common area
maintenance charges
and it includes things
like cutting the grass,
watering the bushes,
trimming the trees,
maintaining the
parking lot and other
jobs.

18. Moreover, if you are
leasing a location
within a business park
with multiple tenants,
you have to take into
consideration these
monthly expenses
while paying your rent.

19. Conclusion

20. There is no particular
method to avoid
paying these
additional expenses
that are associated
with commercial
leases.

21. However, you can be
aware that they exist
and put safeguards in
your lease to limit
your exposure to
these additional
expenses.

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