Many people are faced with the dilemma of whether to lease commercial real estate for their business or purchase. They may find that the ideal location is out of their budget for purchase, but can be leased for a reasonable price. Leasing a property is often a good choice. There are several kinds of commercial leases that you should be aware of.
The gross net contract is an agreement in which the tenant pays a fixed rent amount. The amount of the payment is determined by the property owners insurance, taxes, and other expenses related to the property. While the landlord pays these everyday expenditures the amount of the rent is usually based on these costs.
A finance agreement, also known as a capital lease, is an irrevocable long term agreement. In this kind of contract the leaseholder gains ownership of the asset when the agreement ends. The lessee is responsible to pay the expenses that are owed to the property such as maintenance costs. In addition, the agreement gives him or her tax benefits.
An operating contract allows a company to use equipment such as computers, trucks, hardware, and cars. They do not have ownership of the equipment and it must be returned when the contract ends. Another type of agreement known as a net lease requires the lessee to pay the rent and supplementary operating cost such as taxes, maintenance, and insurance.
There are three types of net leases, they are the single, double, or triple. In the single net contract the lessee will pay rent and property tax. The double net agreement requires the tenant to pay insurance on the building, real estate tax, and tent. Finally, the triple contract has the lessee sharing insurance costs, operation costs, and taxes.
And finally, the land contract, which is also called a ground lease, is an agreement where the lessee rents the land and constructs a building using his own money. At the end of the agreement period the landowner will pay for the building costs and other expenses.
When you lease commercial real estate you may choose the option that best suits your business. You can select the type of contract that has the flexibility that your business needs. Also, leasing allows you to negotiate terms that will benefit your business. You can choose a short or long term agreement depending on your need. With the various leases available, there is sure to be one to meet most any business.
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Source: http://www.abcarticledirectory.com/Article/Lease-Commercial-Real-Estate-For-Your-Business/1563953
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