When you’re trying to find the best real estate lease for your business, it’s important that you have a full understanding of how a commercial lease works. They come in a variety of different forms, with each one having its own advantages and drawbacks.
In this blog, we’re not going to go into the complexities and the finer details of leasing commercial property, rather we’ll be looking at a few of the basic types of lease that are open to you. So, if you’re ready, let’s get started.
The Gross Lease
The gross lease operates in a similar vein to a full-service lease - meaning that the landlord is responsible for the vast majority of the operating costs. That said, these costs are, in reality, being passed on to the tenant as part of the ‘load factor’ which makes up an additional payment that needs to be paid each year.
It involves a fixed monthly rent (aside from the cost of any required utilities) and it doesn’t typically require any outlay for operation or maintenance.
The Triple Net Lease (NNN)
A NNN commercial lease requires the tenant to share the risk of the property’s upkeep. While this does mean that it could potentially involve higher running costs for the tenant with an older property, it does mean that the tenant gets the peace of mind of knowing that bills are paid and that the right vendors are being used for the work.
It’s most applicable to large manufacturing plants, heavy industry and businesses like auto repair shops, as they’re heavy utility operations and more likely to cause property wear and tear.
The Modified Net Lease
Also known sometimes as a modified gross lease, a modified net lease is a combination of triple net lease and gross lease. As you might expect, this hybrid arrangement can be a good compromise between a landlord and tenant looking to come to an arrangement that works for both parties.
It’s a commercial lease agreement that’s ideal for businesses that need a year or two to grow into a profitable state and are looking to strike a deal that will take this into consideration.
The Right Option For YOUR Business?
That very much depends on you and your business and it’s about finding something that suits your needs. The art of negotiation in this sphere is really important too because if you don’t haggle, you’re not likely to get the best deal available. The starting point of being able to negotiate is understanding the subject and that’s where we come in.
Understand Commercial Leases Better With OCA
As you can see, we’ve only just scratched the surface and it’s a subject that’s already getting quite complicated. The good news is that if your understanding of the whole process could be better, there’s a flexible, convenient and affordable way to improve it and it comes in the form of a modular course from Online Courses Australia.
Able to be taken as and when it suits you, our 50 study-hour Commercial & Retail Leasing Certificate will give you everything you need to know about commercial lease agreements and even how to negotiate them with Landlords. So, if you’d like to know more about this or our entire range of online learning options, simply visit us at www.onlinecoursesaustralia.edu.au.
Alternatively, should you wish to talk to us directly about your training needs, we’ll be more than happy to help. Our friendly and accommodating team is available to talk to today on 1300 611 404.
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