If you want to become involved in property ownership from a commercial perspective, you may have seen many opportunities in your local area. In particular, you may have noticed that a unit has become available in a shopping centre, and this looks as if it could be perfect for a specific venture. Yet why do you need to exercise particular care here, and what types of problems could you encounter?
Rental Opportunities
You may look at this property and imagine that you could rent it out to one or more tenants in return for regular income. Much will depend on whether the unit is empty or not at the moment, but if it already has a tenant, you will need to look more carefully at their agreement.
Tenant in Place
To begin with, you need to know when the lease expires and if they have an option to renew. Do you have the capability to increase the rent in future years, or is it restricted in some way? You also need to know how much the tenant pays for management fees or utilities. Sometimes these are the responsibility of the owner and not the tenant, so you may have to factor those figures into your calculation.
Vacant Possession
If the property is vacant, you may have more choices. However, you need to know if the particular type of business you have in mind is acceptable or not. Restrictions may be in place under local town planning requirements, or rules could be controlled by a body corporate. Sometimes, these rules prohibit certain types of business or may give another unit owner rights based on their existing activity. In other words, they may not allow two veterinarians to operate within the same general centre.
Digging for Details
Of course, before you enter into any agreement, you need to make sure that you have all the details to hand. A conveyancer can come to the fore here and know where to look to uncover the information. They also make sure that you have a due diligence clause within your contract should you wish to proceed while all the information comes to light. In this case, you'll be protected if you don't like something that you see.
Treading Carefully
Your business venture could turn out to be very profitable, but you'll want to set everything up correctly at the outset. This is why you need an experienced conveyancer at your side. Contact a local conveyancing service to get started.
Share27 October 2021
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