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What is the difference between commercial and residential lease?

Posted on January 30, 2019 by Genet Group

Although the principle of investing is the same, there are significant differences between the residential and commercial lease and each type has its own merits. Various factors determine the differences between residential and commercial real estate including; property value, cash flow, financing, leasing documents, and tenants.

Purpose of Property

Residential leases are generally for apartments, houses, townhouses, and condominiums. Although some renters can run small businesses out of their homes, they’re mostly sought after for living spaces. Residential properties are generally paid on a monthly basis and termination requires a short notice than a commercial lease.

The primary purpose of a commercial real estate contract is to provide a property to a tenant for running a business. The tenant can use the space for any commercial purpose like the sale of goods or services or provides a place to manufacture some product. The retail space is not meant to give a place to live, and it is often against local or state law to reside in an industrial area.

Value of the Property

The value of a residential property is calculated by comparing the market price of similar properties in that area. The commercial property, on the other hand, can be more expensive than residential properties depending upon its location, neighborhood, facilities, etc.

Length of the Contract

Commercial lease contracts tend to be lengthy in contrast to residential leases as there are a large number of lease terms that are negotiated between commercial lease parties and tenants that may not be necessary for residential contracts. For example, business concerns include security of the space, signage on the building's exterior, and access to communication equipment.

Furthermore, as the residential property can only be used as a place to live, commercial property can be used for multiple purposes. Therefore, it requires to be discussed in detail what the permitted uses of the commercial property are. Commercial leases usually run for several years whereas residential leases typically expire after one year. However, in both of the features, you have the option to renew the contract.

Benefits of Residential Leasing

Residential landlords often take care of things like keeping the premises pest-free and providing necessary maintenance including sewage, etc.  Commercial tenants are usually not accommodated with the same benefits; they’re often asked to do their maintenance for the portion of the property that they’re renting.

Payment on Installments

Most banks are willing to offer more loans for the residential property, and you can buy a residential space with a small down payment and getting 90 percent or more mortgage financing from the bank. On the other hand, banks do not provide much loan or installmentson commercial leases.

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Overall, both residential and commercial properties tend to have their strengths and weaknesses, but you should not conclude that one is better than the other because both serve different purposes for different requirements. Depending on your personal or business needs, finding the right property is possible with the help of Genet Group.

Commercial Leasing: Industrial & Office

Posted on January 15, 2019 by Genet Group

Having a lease that benefits both the landlord and the tenant is imperative. There are various types of leases in the real estate industry, therefore, being accustomed to them all is crucial while you’re choosing any party. You might end up in hard negotiations, but if you’ve done your homework, then you won’t be intimidated. Take the time to get a brief rundown of commercial and residential leases, so you’re entirely knowledgeable beforehand. 

Residential Lease

It’s quite simple, and most people don’t have trouble understanding it, either. Tenants usually need to pay their rent and utilities which comprise of water and sewer exclusively. You would settle the amount with the landlord, and an agreement would be drawn without many complications. However, commercial leases are a bit more complicated, and several other factors need to be considered. Your business type often determines the type of contract that you would be paying the landlord.

Retail Store

Most retail stores that are seasonal tend to have fluctuating sales that depend on various factors. Ask any Christmas or Halloween store, and they’ll tell you what their particular peak season is of the year. Therefore, lease arrangements need to be made with these commercial stores accordingly. The landlord should devise a plan by talking with the tenant to ensure low lease payments during slow months. These sorts of leases are generally known as Percentage leases to offer the retailer a solid option to maintain their rent and business when traffic is slow.

Office Space

If there is an office space with a steady income flow, then a gross lease would be best suited for these conditions. The tenants would prefer a residential type of lease agreement where there is a fixed amount every month, and they’ll also be responsible for their utilities. However, the building maintenance and repair charges aren’t included in these agreements; the landlord would be responsible for them.

Industrial Space

Firstly, the buildings that are given to these heavy-duty industries must be robust and should withstand maximum wear and tear. As these industrial spaces are machine intensive and would cause significant strain on the structure, the lease agreement should be pinned down considering all the contributing factors. Most landlords would prefer a Triple Net Lease in these situations as the maintenance costs are quite high and they’ll want the tenants to do their fair share.

In the Triple Net Lease, the tenant is bound to pay a significant share of expenses of operation, insurance, and taxes for the rented unit. This works best for both parties as the landlord can keep maintaining the structure more appropriately, and the building withstands the operations of the business. It does cause a strain in the backs of tenants as they have to pay more. However, if they choose the right building with the proper structure and age, this can efficiently work for both parties.

Genet Group

Lastly, it’s important that you devise an excellent leasing agreement with your lawyer in the room so both parties are crystal clear on the terms and no ambiguities are left. If you do your homework before, then you won’t end up in problems later! Keeping our customers informed throughout the time of their lease is our top priority. We manage over 1.8 million square feet of properties, and to continually do so, we stand by our word when conducting business.

Things to Consider Before Leasing Storage Space

Posted on January 15, 2019 by Genet Group

When you are looking for a storage space to rent, make sure you find the right one where all your belongings will be safe, secure, and protected. Of course, finding the right retail space takes time, effort and patience. The location is crucial as well, and you have to consider lots of factors before settling on a final spot. The more research and planning you do, the more are the chances that your business would grow exponentially and transform your visitors to customers. Nonetheless, every customer has his list of priorities when it comes to renting a storage space.

1.    Security

Security is a most important factor while leasing a storage space to rent particularly if you have to store some important files and records, sensitive data, monetarily documents, and valuable items. Go for a storage space that offers adequate security measures like gate access codes, surveillance cameras, state-of-the-art lighting, and individual unit protection. If you’re able to have a security guard on the property, take advantage of the opportunity.

2.    Climate Controlled Storage Unit

If you are planning to save some climate and temperature-sensitive belongings or items such as electronics or wood furniture, choose a climate-controlled unit that provides maximum protection to your belongings from extreme weather conditions. Such storage units do cost a little more, but they offer great peace of mind making sure all your items won’t be subjected to any severe and unfavorable climate conditions.

3.    Location

Location is another important factor which needs to be taken into account when choosing a storage unit because you will have to consider how far you want to travel to reach the storage unit. If you want it to be close to your home or office, then choose a one nearest you. Having a storage facility in your proximity would be more convenient and beneficial for regularly checking on your belongings.

4.    Travel and Storage Insurance

In case of any loss or damage, opt for insurance for the items you store while you are traveling or moving away. Figure out your current policy guidelines to identify if any additional protection is needed when you rent your storage unit. Make sure your policy covers all your belongings that are stored off-site in a long-term storage unit.

5.    Required Amount of Space

Figure out how much space you need to store all your belongings including furniture, electronics, equipment, and other official records. Go for only those storage units which have enough space to accommodate all your belongings safely and securely. If you know that you are going to store more substantial items, consider that as well.

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Nonetheless, by considering these factors and more, you will be picking a reliable and safe storage facility making sure that your belongings are correctly and safely stored. Depending on the type of industry or personal items you own, choosing the right storage space can make or break your experience. With Genet Group, you can rest assured that you’re in the right hands.