Guide to Leasing Commercial Property to Large Franchises for Maximum Profit

For anyone seeking to lease their commercial premises to a franchise company, this guide will be useful. These guidelines include key steps on how to get tenants and retain them hence guaranteeing a constant stream of income from the rentals. Find out what commercial real estate and the various categories including; shopping centers, stores and offices and how to approach renting them. Understand factors such as identity confirmation, leasing, and marketing of properties through NoBroker among others. Whether one is a complete novice to CRE or looking to get more for your money, this article offers lighting into leasing techniques and the advantages of franchising associations.

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–

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• 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.

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.

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?

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 thought of - 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?

Frequently Asked Questions

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