How to Rent Your Commercial Property or Shop To a Franchise
Introduction
Have you ever considered, “I want to rent out my business property or franchise my shop?”
Nonetheless, the bulk of franchise tenants will be quite particular about the premises they inspect and evaluate for future occupancy. As a result, the more successfully you market your business property, the more likely you are to earn the best price for it. Here are some of the finest strategies to get ready to rent out your commercial property to a large franchise.
This post will answer your questions about why people invest in commercial real estate, what commercial real estate is, why it’s important to rent to the right company, and how I want to rent my shop to a franchise. You will also learn how to rent out your commercial property to a large franchise and how to keep your rental income steady.
What exactly is commercial property?
Residential property is purchased for personal use, whereas commercial property is purchased for commercial purposes. It is defined as any structure that can create income and is purchased or used with the goal of generating profits. Because commercial property is profit-driven, various rules and laws must be observed while dealing with commercial property. When renting out a commercial location.
What Kinds of Commercial Real Estate Investments Exist?
When considering investing in commercial real estate, you must consider two crucial factors: where to invest and what type of business property to invest in. The location can even be determined by the sort of commercial property. Before deciding on a final company space for rent, consider the following options:
- Retail establishments
- Warehouses
- Buildings for offices
- Coworking space in industrial buildings
- Restaurant/Cafe
- Other business
Why do people invest in commercial real estate?
Many people prefer to invest in residential property since it is easier to find and deemed less risky. However, if you know what you’re looking for, conduct the necessary research, and choose to invest in commercial property, you will most likely make a much higher profit than those who invest in residential property. However, you should keep in mind that it requires a larger initial investment than residential real estate. Even the property tax on commercial versus residential properties will differ, with each having its own set of advantages and disadvantages.
How to Lease a Commercial Building
The steps for renting a commercial property are as follows:
Title Ownership Validation:
Always make sure you understand 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 lease commercial property. Conduct additional research before agreeing to a lease with the landlord to ensure there is no sub-rent or other type of rent associated with the property.
Power of Attorney and Sanctioned Plans:
If the property you are renting is a building under construction, it is generally advisable to examine the title deed and commencement certificate provided by the necessary authorities. Before renting office space in a built-up property, double-check the occupation certificate. In the case of indirect rent, it’s also critical to investigate and clarify whether any kind of power of attorney is involved.
Appropriate Renting Agreement:
Before entering into any form of mutual commitment with the landlord, make sure that the renting arrangement is assigned based on operations. Whether it’s a rental leasing agreement or a co-working office space arrangement, be specific about the nature of the rent.
Income Taxes and Mortgages:
Before entering into a commercial agreement, it is always a good idea to look into the landlord’s income tax history to determine whether there are any ongoing issues or illegal processes. This will also tell you whether the property is classed as ‘commercial’ or’residential’ under the Income Tax Act of 1961’s Development Control Regulations. If this classification is unclear, you could face a TDS in the future.
Background Check on the Real Estate Agent:
It is also critical to run a background check on the real estate agent before hiring him. Previous rent agreements and word of mouth may provide information on the brokers. Insist on the agent providing information on past clients with whom they have worked. Their unwillingness to do so could be a clear indicator of earlier fraudulent behavior.
Rent Agreement Validity:
In addition to other terms, a company leasing agreement must have the following basic information:
- Dates of commencement and end
- Property Location
- The total rental cost as well as the deposit amount.
- Intervals of Payment
- Lease renewal terms
- All of the parties’ names, as well as their signatures, are included.
What exactly is a franchise lease?
It is not difficult to rent out your shop to a franchise. Franchise Leases are any leases, sublet agreements, and other arrangements or Contracts under which the Company or any of its Subsidiaries grants a Franchisee the right to lease, use, or occupy any Real Property. Despite the foregoing, Franchise Agreements are not included in the definition of “Franchise Leases.” You are responsible for the lease or rent regardless of the property’s franchise lease arrangement. As a result, if you choose the franchisor’s lease option, you should be aware of the various levels of control and obligation you will have.
Guidelines for renting your Commercial Property to a Franchise:
Engage the services of a knowledgeable commercial real estate broker:
This is the simplest and most effective way for locating franchise owners. Everything can be handled by a business real estate broker! Commercial real estate brokerages only focus on leasing and selling commercial real estate such as office, retail, and industrial spaces.
Commercial real estate brokers charge a percentage of the total lease amount as a result of their contractual responsibilities to you. As a result, you will not be required to pay them until the lease is concluded. These payments can also be structured so that you do not have to make them until you receive funds. Spending half of the commission after collecting the first month’s rent and security deposit at lease execution and the other half at the beginning of rent can help you avoid being out of pocket, but it is not the most common method.
Make a 3D virtual tour:
In the future, commercial real estate marketing may profit from 3D virtual tours. These visits are especially beneficial for franchise owners who may not be able to personally visit a location before opting to relocate there. With a 3D tour, you will have an advantage over your competitors. It is considerably easier than you may think to use a spherical camera with a tripod. Place it in the desired area and activate it with a phone app.
Establishing a Network via Commercial Real Estate Associations:
One of the finest methods to expand your network is to join a commercial real estate organization. It may also help you establish your credibility as a commercial real estate owner by providing you with access to franchise owners, resources, and continuing education opportunities that you would not otherwise have. If you belong to one of the commercial real estate owners’ organizations, prospective franchise owners will believe you are more established than someone who is not a member.
Billboard Advertising
One of the most obvious ways to promote your commercial real estate advertisement is through a billboard, which is sometimes overlooked. If you decide to use this method, keep your billboard campaign simple: include a distinctive commercial real estate phrase as well as specific descriptions of what you are offering as a selling factor to a prospective franchise buyer. Your contact information should be in large print that is visible from the road.
A decent commercial real estate billboard should not be cluttered with photographs, companies, fonts, or different colors. Select a focused image to go with a few lines of text in two or three complementary colors.
Make use of drone footage:
Consider flying a drone over the property if you truly want to elevate your marketing to new heights, both literally and metaphorically. Prospective franchise buyers can get a bird’s eye view of a property and a sense of the surrounding area by using drone footage. Furthermore, it adds a professional touch to your marketing. If you don’t have a drone, you can hire a local drone expert to take the photos and videos for you.
Display your advertisement on social media:
Knowing how to market on Facebook and other social media platforms will help you produce more leads for your commercial real estate company. Creating commercial real estate Facebook advertising is simple thanks to the platform’s user-friendly design.
Using Facebook’s filters, you can target potential commercial real estate franchise buyers based on their location, commercial property interests, and demographics. Select high-quality images of your property for your Facebook ad. To entice viewers to click through and learn more, the most effective Facebook advertisements use eye-catching images and gripping videos.
In a sea of commercial real estate Facebook adverts, video is an excellent method to distinguish your ad from the crowd. In addition to Facebook, you can use one of the many other social networking sites available, such as LinkedIn, Instagram, and Twitter.
Maintain simplicity:
Commercial real estate marketing does not have to be difficult. You’ll be on your way to a regular supply of new commercial real estate buyer leads as long as you maintain your message brief and compelling.
Can you rent out your commercial space to small businesses as well?
Yes, not everyone requires massive franchises to rent or lease property. You can look at small, medium, and large enterprises; it all depends on the amount of space you have and whether your needs can be met. Most investors choose huge brands and franchises since they are guaranteed an income, the business is reputable and will not default on rent payments, the business will honor its pledge, and so on. This does not imply that other businesses will default on payments if you have a solid leasing agreement and have performed the necessary due research.
Conclusion
Before you begin your search, you should determine what type of commercial facility you want to invest in: office space or warehouse? Is it a business or residential property? Is it a dining establishment or a co-working space? Is it a retail establishment or an office? Each selection you make will have an impact on the quantity of money you need to invest as well as the location. If you want to acquire a warehouse, for example, it makes little sense to do so in a desirable location. You should look for a large property on the outskirts of town.For a retail space, you will need to hunt for commercial buildings in the city’s shopping districts and be prepared to pay somewhat more money, but you will also receive extremely strong returns.
You can begin your search now that you have a good concept of what type of home to look for and where to seek. An online portal or software like NoBroker is the best and easiest way to search commercial real estate. You will find all types of commercial establishments for lease or sale here. You can search for these commercial buildings based on location and budget, and you can save thousands of dollars on brokerage!
