Commercial Property Investors – How Much Rent Should You Charge?

When it comes to renting a commercial property, many investors struggle to calculate the right amount to charge. Charge too much, and your property will be at risk of sitting unclaimed on the market for an extended period. Conversely, charge too little, and you’re reducing your return on investment and may potentially devalue your property. So how do you determine the right balance? Lawyer and solicitor Glenn Duker offers some guidelines.


Do Your Research


It’s imperative to understand the distinction between commercial and residential rental rates. Commercial rent is significantly different from residential properties as it is calculated on a rate per square meter, so the larger your space, the more you can charge.


Next, you need to consider the factors that can influence the rental rate. Features such as the size of your property; its location; the age/ condition of your building and surrounding tenants all play a role in determining how much rent you should charge. For instance, a new building in a trendy area next to a high value tenant will command a higher price than the same size building in the quietest part of a sleepy town. It’s therefore important to understand the place your property occupies in the wider marketplace to decide on a fair rental rate.


Compare with Neighbours and Competitors


Next, review and compare recent leasing transactions within the relevant market to see what your competitors are charging. It’s a good idea to use online search engines to gain an insight of the current rental rates for similar properties. You should also conduct research on the ground by speaking to as many locals and landlords as you can in the immediate area. This will help you gain a sense of how much is being charged both on your industry and location.


Ultimately, your goal is to receive a substantial return on investment while ensuring your tenants stay for a long term. With the right information and research behind you, you’ll be able to facilitate a successful rental transaction for your property.


Looking for legal advice regarding lease agreements and property law? Contact lawyer and solicitor Glenn Duker for professional assistance.

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