If you’re wondering why people invest in commercial real estate, what is commercial real estate, why it is important to rent to the right business, or how I want to rent my shop to a franchise, this article will give you the answers you seek. You will also learn about how to rent out commercial property to a big franchise and how to keep your rental income coming in.
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What is Commercial Property?
Residential property is when people buy property to reside, commercial property is any property that is used for any business activity. It is considered as any building that can generate profits and is bought or used with the intent to generate a profit. As commercial property is profit-driven, there are different rules and laws that have to be followed when dealing with commercial property. when using a commercial space for rent.
What are the Different Types of Commercial Real Estate You Can Invest in?
When you’re looking at investing in commercial real estate you need to figure out two important factors, one – where to invest and two – in what type of commercial property. You can even decide the location based on the type of commercial property. Here are a few options you should explore before settling on final business space for rent–
- Retail stores
- Warehouses
- Office buildings
- Industrial buildings
- Co-Working space
- Restaurant/Cafe
- Other business
How to Rent Commercial Property?
Given below are the steps on how to rent a commercial property-
Title Ownership Validation:
Always make sure you know everything there is to know about the property’s ownership, which means you’ll need access to the title document to verify the rent or even use commercial property for lease. Before agreeing to a lease with the landlord, conduct more research to ensure there is no sub-rent or other type of rent linked with the property.
Power of Attorney and Sanctioned Plans:
It is generally advisable to examine the title deed and commencement certificate provided by the necessary authorities if the property you are renting is a building under construction. Check the occupation certificate before renting business space in a built-up property. In the case of indirect rent, it’s also crucial to investigate and clarify if there’s any kind of power of attorney involved.
Read: 8 Important Tips to Follow When Renting to a Stranger
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Appropriate Renting Agreement:
Ensure that the renting arrangement is allotted based on operations before getting into any type of mutual commitment with the landlord. Whether it’s a rental leasing agreement or a co-working office space arrangement, be precise about the nature of the rent.
Verification of Income Taxes and Mortgages:
In the case of a commercial agreement, it is always a good idea to investigate the landlord’s income tax history to see whether there are any current disputes or illegal proceedings. This will also tell you whether the property is classified as ‘commercial’ or ‘residential’ under the Development Control Regulations under the Income Tax Act of 1961. If this categorisation is unclear, you may be assessed a TDS in the future.
Property Agent’s Background Check:
It’s also crucial to conduct a background check on the real estate agent before hiring him. Past rent agreements, as well as word of mouth, might provide information on the brokers. Insist on the agent’s revealing information on previous clients they’ve worked with. Their reluctance to do so could be a strong indicator of previous fraudulent conduct.
Validity of Rent Agreement:
In addition to other clauses, a business leasing agreement must have the following fundamental information:
- Commencement and termination date
- Location of Property
- The whole rental amount as well as the deposit information.
- Payment Intervals
- Terms of lease renewal
- All of the parties involve d’s names, as well as their signatures.
Why do People Choose to Invest in Commercial Real Estate?
Many people prefer to invest in residential property because that is more easily available, and it is considered less risky. But, if you know what you’re looking for, do the required research and choose to invest in commercial property, you are likely to make a much higher profit than those who invest in residential property. But you should keep in mind that it also involves a higher initial investment than residential real estate. Even the property tax on commercial vs residential properties will vary and each would come with its own benefits and demerits.
Read: Income from House Property and the Laws That Govern It
What is a franchise lease?
Wanting to rent your property to a franchise is not hard to do. All leases, sublet agreements, and other arrangements or Contracts under which the Company or any of its Subsidiaries has granted a Franchisee the right to lease, use, or occupy any Real Property are referred to as Franchise Leases. Despite the preceding, any Franchise Agreements are not included in the term “Franchise Leases.” Regardless of the franchise lease arrangement of the property, you are responsible for the lease or rent. As a result, you should be aware of the various levels of control and obligation you will have if you choose the franchisor’s lease option.
How to Get a Big Franchise to Rent this Property?
Now that you have invested in commercial real estate, the next step is leasing it out or renting it out to a good company or a big franchise so that you can make a sizable rental income. The first step to doing this is to create a property listing on NoBroker. Here you will have to provide some basic information about your property such as –
Read: Landlord Duties: Legal Rights and Obligations of Landlord and More
- Property type (warehouse, office building, etc.)
- Building Type (Business Park, mall, standalone building)
- Super Built-Up Area
- Floor position and information (3rd floor out of 7 floors, basement out of 2 floors etc.)
- Furnishing status (fully furnished, plug and play, etc)
- Age of the commercial building
- Location (main road or corner property)
- Locality information (street name, landmark and position on the map)
Once you have entered the basic information about your commercial property, you need to provide information on your rental expectations and show interested franchises all the benefits they will get from choosing your commercial property. To do this, you will need to enter –
- Expected Rent
- Deposit
- Lease Duration and Lock-in Period
- Date of availability and what the property is best suited for (restaurant, retail, office, etc.)
- Add pictures and videos of your property (the better the pictures, the better the response)
- List out the amenities your space has to offer like power backup, parking, security, etc.
- Lastly, you can describe the property in detail. Here, you can talk about the special features or benefits your commercial property has over the others in the area.
When you have entered all the above information, you can sit back and relax. Most good franchises look online for great spaces to rent. If you have entered all the relevant information and provided good quality pictures and videos, your property will instantly stand out and attract the right interest.
Read: Family Vs. Bachelor Who Makes a Better Tenant?
Can I Rent out my Commercial Property to Small Business too?
Yes, not everyone needs to rent or lease property to large franchises. You can look at the small, medium, and large businesses, it all depends on the space you have and if your requirement can meet their requirement. Most investors look for large brands and franchises so that they are guaranteed an income, the business is reputed and won’t skip out on paying rents, the business will honour their commitment and so on. This does not mean that other businesses will skip out on payments, as long as you have a good, air-tight, lease agreement and have done the required due diligence.
If you need any assistance finding the right commercial property or finding the right buyers or tenants for your commercial property, just contact NoBroker. We have experts who will help you with your requirement. You can click the link below to rent out your commercial property on NoBroker.
How can I give my shop on rent to some bank for ATM?
If you have a recurring thoughtof – I want to rent out my commercial property in India, then giving your property to a bank to install an ATM is an excellent method to make money without putting in a lot of effort. Giving your commercial property to the bank for ATM installation can earn you up to 1 lakh rupees per month.
Bank Requirements for ATM Installation in a Building
- All financial debts on the property should be paid off.
- The property should be in a business district or a densely populated residential neighbourhood.
- The city municipal authority must provide you with permission to construct an ATM.
- A property’s surface area should be between 60 and 100 square feet.
Steps to Give a Commercial Property to Rent for the Installation of an ATM
- If you wish to rent out your property for a bank installation, you should keep an eye on the bank’s online and offline adverts, such as those in daily local publications. The use of print advertisements to obtain a property is a method that is still widely used in banks. As a result, keep an eye out for bank commercials. You can come across a bargain without even looking for one.
- Along with this, you can go to other banks.
- You must first schedule an appointment with the branch manager.
- Visit the bank with the property documentation and approval from the municipal authorities after your meeting has been scheduled.
- Now, wait for the approval.
How to Rent My Property to a Company?
Corporate housing has gained popularity in the recent few years. A concept in which a furnished home is rented to a company rather than an individual, with all of the amenities and services of a hotel but without the housekeeping. This type of property is utilised to accommodate personnel of a firm who are visiting the city for 10 days or more.
In the case of corporate housing, the property is rented by an organisation, and any employee on a business trip to the city is welcome to stay there. The company can pick whether administrative staff or blue-collared employees live there, depending on what you offer in the property, its size, and its location.
Can you lease a property to yourself?
There is a yes or no answer to this question with a lot of terms and conditions. If you are a business owner, you can lease the property to your own firm. This ensures your continuous access to both work and property. You can also lease your own home, but there are various regulations that need to be followed.
Is it better to lease or buy commercial property?
A common question in the real estate market is – Is it better to rent or buy a shop? The answer to this depends on varying reasons which again may be different for all.
Reasons to Think About Leasing
- There are a number of reasons why leasing a commercial property can be a better option for your company, including:
- Your company is expanding, and you’re unsure how quickly you’ll overrun the space.
- You’re short on cash and can’t afford a down payment.
- Your business is still in its inception and is still in the “building phase.”
- Your company is new to a market area, or your client base is concentrated in a small geographic area, and the only way to keep customers is to lease.
- You have a tight deadline and require a structure right away.
- You are offered reasonable lease conditions.
Reasons to Think About Buying
However, there are situations where owning the property is a better fit for your company, such as when:
- You’re accumulating long-term wealth and equity.
- Many small businesses can buy a property with a 10% down payment and with help of loans from the bank.
- If your firm fails, closes, or you want to sell it, you have real estate to fall back on, or you may rent it out to renters.
- You may be eligible for certain tax benefits.
Posting your Ads on social media
The digital age and the pandemic have been a time where you will find very few people who are not using social media. Today, even more than advertisements on billboards on the roads, a far more effective way to ensure more people know about your ads on social media. So, while you may already be going for an ad on high-traffic areas of a locality or sticking bills on walls or more, be sure to also explore social media platforms such as Instagram, LinkedIn, Facebook etc. It is very easy to use and can also show very detailed information about the number of people, the demographics of people, as well as the locations from where people are viewing your ads. Ensure that you use eye-grabbing images and video walkthroughs to give a detailed tour and information about your property to stand out from the competition.
Setting up a Network through Commercial Real Estate Associations
Joining a commercial real estate organisation is one of the best ways to broaden your network. By giving you access to franchise owners, resources, and continuing education opportunities that you would not otherwise have, it might also aid in building your credibility as a commercial real estate owner. It gives the idea that you are more established than someone who is not a member to prospective franchise owners if you are a member of one of the commercial real estate owners’ organisations.
Make Use of Billboards
One of the most noticeable ways to promote your commercial real estate campaign is the billboard, which is frequently disregarded. If you choose to use this tactic, keep your billboard advertisement straightforward and include a catchy commercial real estate tagline as well as clear descriptions of the benefits you are offering a potential franchise buyer. Your contact information ought to be written in clear, large text that can be seen from the side of the road.
A decent commercial real estate billboard shouldn’t be overcrowded with images, logos, fonts, or vivid colours. Select a clear image to go with a few lines of text in two or three complementary colours.
Provide 3D Virtual Tours to Potential Customers
Future marketing for commercial real estate might benefit from 3D virtual tours. These tours are especially useful for franchise owners who might not be able to personally travel to a location before opting to settle there. You will have an advantage over the competition if you use a 3D tour. Contrary to popular belief, using a spherical camera on a tripod is really simple. Place it where you want it to go, then use an app on your phone to turn it on.
Commercial real estate marketing doesn’t have to be a bother. You will be on your way to a consistent flow of new commercial real estate buyer leads as long as you keep your message succinct and interesting.
Hire a Commercial Real Estate Expert
Commercial real estate brokerages solely deal in leasing and selling commercial real estates, such as office, retail, and industrial premises.
Commercial real estate brokers are required by their contractual responsibilities to you to charge a percentage of the total lease amount. Therefore, you won’t have to pay them until after the lease is over. You might not be required to make any of these payments until you get money, depending on how they are set up. It is not the most common option, but you can avoid being out of pocket by paying half of the fee at lease execution after collecting the first month’s rent and security deposit and the other half at the beginning of the rent.
What is the Best Way to find Commercial Real Estate?
Before you start your search, you need to figure out what type of commercial building you want to invest in, is it an office space or a warehouse? Is it a residential commercial property? Is it a restaurant or a co-working space? Is it a retail store or an office? Each decision you make will affect the amount you need to invest, and the location too.
For example, if you want to buy a warehouse, then it will make no sense to do so in a prime locality. You are better off picking a large property on the outskirts of the city. For a retail space, you will need to look for commercial buildings in the shopping districts of the city and be ready to invest a lot more money, but you will also get very good returns.
Now that you have a fair idea of what type of property to look for, and where, you can start your search. The best and easiest way to find commercial real estate is through an online portal or app like NoBroker. Here you’ll find all types of commercial establishments for commercial lease or sale. You can search for these commercial buildings based on location and budget and you will be able to save lakhs on brokerage!
FAQs
Q1. Can I rent my space to a franchise?
Yes, you can rent your space to a franchise. But to rent your property to companies your property should meet the specific requirements and standards set by the franchisor. It’s essential to negotiate terms that align with both your interests and the franchise’s operational needs.
Q2. What should companies looking for rental properties consider when choosing a location?
Companies should prioritise accessibility, local amenities, and the potential for future growth in the area to ensure a strategic fit for their business needs.
Q3. How to find tenants for commercial property?
To attract tenants for your commercial property, leverage online real estate platforms, network with local businesses, and employ targeted marketing strategies to highlight the property’s unique features and location advantages.
Q4. I want to lease my commercial property. How do I determine the appropriate rent amount?
To set a suitable rent for your commercial property, research local market rates, consider property features and location, and possibly consult a real estate expert.
Q5. How to give commercial space for rent?
Ans. Wondering how to give property on rent? To rent out your commercial space, first ensure it meets all local zoning and safety regulations, then market it effectively online and through local real estate agents to reach potential tenants.
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