One of the most researched subjects by property owners and tenants is real estate rental. Real estate rental is often confused with home rental. However, real estate lease is a completely different type of lease. Here are the questions about real estate rental.
What is Real Estate Rental?
Lease of real estate, also known as leasing property, is a contractual arrangement between the owner (landlord) and the resident (tenant) of the real estate that allows the lessee to occupy and use the property for an agreed period of time in exchange for paying rent.
A landlord is the owner of real estate that is leased or leased to an individual or firm. In a real estate lease, it is the person who gives the lease for commercial property. The lessee is the occupant and owner of the real estate given by the landlord through a real estate lease or lease agreement.
Types of Real Estate Rentals
There are various types of real estate leases. Among these, the most frequently used rental types are as follows:
Full Service Property Rentals
Used in multi-tenant office buildings.
Tenants pay a single lump sum for a wide variety of services in addition to paying rent.
The landlord has to cover security, cleaning and maintenance services for their tenants.
The landlord is also responsible for providing various utilities such as water, electricity, heat, air.
Gross Real Estate Rental
The tenant pays the landlord a gross amount for rent.
Property costs such as insurance, property taxes, and maintenance are the landlord's responsibility.
The tenant is responsible for the public services he/she uses.
Sometimes the lease may contain provisions that require the tenant to cover property costs that exceed a certain level.
Variations of this basic rental arrangement include apartment rentals and incremental rentals.
Flat rental is the most basic type of contract, and commercial property for lease is often the most popular among small businesses. The tenant pays a fixed price for a certain period of time.
Progressive leasing requires that the base lease payment be increased incrementally over time, due to the recognition of possible increases in landlord expenses in areas such as taxes, insurance premiums and maintenance.
On the other hand, a related lease, commonly known as a cost-of-living lease, includes rent increases based on general inflation figures rather than increases in specific expenses.
Net Real Estate Rental
It is the most common type of lease agreement.
In addition to the basic rent, the tenant pays the landlord an additional amount that covers the tenant's share of property taxes on the property. When taxes increase, it is the tenants responsibility to cover these costs.
Each tenant's liabilities are calculated by determining what percentage of the total property is occupied by each tenant.
Percent Real Estate Rental
This rental arrangement is a favorite with landlords who own property in coveted retail spaces.
It requires tenants to pay a base rent and/or a percentage of the tenant's gross income.
This percentage, which can be up to 10-12 percent in some contracts, is paid annually, semi-annually or quarterly.
However, some malls require more frequent payments.
