If done properly, leasing out your commercial property can be a pretty lucrative deal. The difficulty lies in the fact that so many things can go wrong to reduce or eliminate the profit. And on top of that, negotiating the lease can be a time-consuming, headache-inducing process. So it pays (literally) to know about all the factors you need to take into account in the leasing process. To help you out, here’s a brief guide detailing what you should know about leasing your commercial property in Cold Spring.
Market Research
Before you take any definite step toward leasing your commercial property in Cold Spring, you first have to research the market. You simply have to have a handle on the commercial real estate market in the area and what you’ll be facing in your leasing efforts.
According to industry experts, “[y]ou need to know everything you can about the commercial real estate market before you even think about leasing. What is the vacancy rate for commercial properties in your area and region, for example? What are the market rates for commercial properties like yours?”
In addition, you need to understand the market in terms of the kind of commercial property you will be leasing out. For example, “[y]ou need to know everything you can about the commercial real estate market before you even think about leasing. What is the vacancy rate for commercial properties in your area and region, for example? What are the market rates for commercial properties like yours?”
Certainly, you should do as much market research as you can on your own. But don’t neglect the power of working with a Cold Spring agent who has experience with commercial properties. To consult an agent, just call (914) 407-3322.
Vetting Prospective Tenants
Once you’ve laid the foundation for leasing your commercial property by researching and understanding local market conditions, it’s time to think about tenants. And that means learning everything you can about prospective tenants and vetting them carefully.
“Once you advertise the property, you will start hearing from prospective tenants. Familiarize yourself with their business. First, you need to require their financials in order to assess their ongoing ability to pay. Make sure they have a strong and robust long-term cash flow. Second, analyze any special needs,” such as whether they will require any corporate signage on the property.
Basically, in vetting tenants, you need some assurance that the business you lease your commercial property to is a viable business.
Checking into Zoning and Technology Upgrades
When leasing your commercial property in Cold Spring, you also need to know exactly what your commercial property is zoned for. “When considering prospective tenants, be sure you know what your properties are zoned for. Zoning laws and regulations change regularly, so be sure you update your knowledge for every new tenant. Leasing to a business in an area not zoned for it is not going to be viable long-term for you or them and can result in fines and fees.”
Further, you should consider whether your property is set up to meet the technology needs of tenants. Older buildings may not the technological capabilities that most businesses need today, and in that case, you’ll likely have to update to attract good tenants. If you do retrofit for modern technology, “be sure to advertise the new state-of-the-art technological capability.”
Asset-Management and Property-Management Capabilities
Now, we come to the nitty-gritty, nuts-and-bolts aspects of leasing your commercial property: your asset-management capability and your property-management capability.
Leasing out a commercial property involves a significant amount of asset management. “Asset managers can give you advice on a spectrum of issues that arise in commercial property leasing, ranging from market knowledge to making improvements, doing regular maintenance, watching the financial achievements of your tenants, and proactively monitoring upcoming lease rollovers.”
And then there’s also property management. “Some commercial property owners act as their own property managers, inspecting the building and receiving monthly leasing fees. Others contract the work either to asset managers or to specialized property managers.”
Understanding the Taxes
When leasing your commercial property, you absolutely must understand your tax situation, especially now that tax codes are changing. Experts recommend that you “[c]onsult with advisers on any changes in federal, state and local taxes every year. Do this early, so you have plenty of time to plan for any changes in the taxes required or the allowable regulations and deductions.”
You also need to factor any tax changes into the rent charged. And it pays to optimally time the purchase of equipment or the cost of repairs to take advantage of any tax breaks.
Leasing Your Commercial Property With the Pros
Leasing out your commercial property, while it has the potential to be lucrative, can also be a very complicated undertaking. You can, however, make everything much more manageable (and possibly more profitable) by working closely with an experienced Cold Spring agent. So if you plan on leasing your commercial property in Cold Spring, contact us today at (914) 407-3322.