real estate

For investors, commercial real estate offers the possibility of some capital growth as well as rental income. Compared to residential real estate, investing in commercial real estate typically demands more knowledge and capital from investors. Colorado hoa management companies have a lot of knowledge around properly running commercial property management.

Individuals can effectively engage indirectly in publicly traded real estate investment trusts (REITs).

What Is Commercial Real Estate (CRE)?

Commercial real estate (CRE) is land only used for business-related activities or to offer a workspace, as opposed to being utilized as a residence, which would fall under the residential real estate category. Most frequently, renters lease commercial properties to businesses, ranging from large shopping malls to single storefronts.

Commercial real estate has enjoyed a high level of investor interest in recent years, especially among institutional investors. Statista estimates that the sector generates over 30 trillion dollars worldwide revenue annually. The EMEA area (Europe, the Middle East, and Africa) is the largest market for commercial real estate, accounting for one-third of the projected size of the global industry.

The Basics of Commercial Real Estate

The two main types of real estate property are commercial real estate and residential real estate. Residential properties are those set aside for occupancy by people rather than for commercial or industrial purposes. 

Commercial real estate, as the name suggests, is used in business, and multi-unit rental properties that are homes for tenants are regarded as the landlord’s commercial activity. 

Depending on its use, commercial real estate is often divided into four classes:

Office space

Urban and suburban office buildings can often be divided into two categories. Skyscrapers and other high-rise structures used as urban office buildings can be found in cities; some have a size of up to a few million square feet. Office buildings in the suburbs are frequently smaller and arranged in office parks.

Industrial use

Most industrial buildings are found outside of metropolitan areas, particularly along important transportation corridors, where they contain industrial operations for various tenants. Industrial parks can also be created out of low-rise structures.

Multifamily rental

All residential real estate types besides single-family homes are included in the multifamily sector, including apartments, condos, co-ops, and townhomes.

Retail

Properties that house the shops and eateries we frequently visit are classified as retail. They may be multi-tenant (typically with an anchor, or main tenant, who helps draw traffic to the site), or they may be independent single-use structures.

Managing Commercial Real Estate

Large commercial real estate properties require thorough and consistent maintenance to keep their value. Commercial real estate managers are the professionals who ensure your commercial properties remain in excellent condition while you find someone willing to buy or lease the property. 

In addition, they help link property owners with finding, managing, and keeping tenants, supervising leases and financing alternatives, and coordinating maintenance and marketability of the property.

Top Strategies for Finding a Good Property Manager

• Request recommendations from friends and coworkers.

An excellent place to start your search for property management is by speaking with people you already know and trust. Ask around among property owners, realtors, acquaintances, alums from your alma mater, real estate investors, and contractors.

• Online resources for property managers

The following action is to conduct online research. You can research potential property managers and come up with unique names.

• View Their Estates.

Examining property management on-site might be a fantastic approach to judging them. If there is trash or debris on the property or nearby, it is a warning sign, and you should look out for any visible repairs that are required.

• Conduct Several Interviews.

To locate the ideal manager for your property, you should conduct in-person interviews with several candidates.

• Verify licenses and credentials.

To show vacant flats, most states require that property managers or management firms possess a real estate broker’s license or a property management license.

• Recognize the terms of the management contract.

Before signing a management agreement, be sure you comprehend its contents because it is a legally binding contract between you and the property manager.

The Importance of Good Property Management

1. Return On Investment (ROI)

A competent property manager understands how to increase the rental yields on your investment property. Your property will produce a better return on investment if you have a suitable rental income. When the hiring property manager works for you, your property portfolio will run like a well-oiled engine.

2. Improving The Quality of Life of Others

To purchase, rent, and move. They can all be difficult for people. Good property management considerably improves the quality of life for tenants.

3. Safety For All

The security of neighboring renters is guaranteed by good property management. You are in charge of reviewing applications and preventing any shady renters from signing a lease.

4. Proper Planning

Property management that is done well looks fantastic now and in the future. To maintain the portfolio’s strong financial performance, a property manager should manage it with common sense.

5. Maintaining Healthy Relationships

Effective property management depends largely on one’s capacity to build and maintain positive relationships. It’s crucial to be able to connect and build strong relationships with both the tenant they are in charge of and the real estate investor for whom they work.

How Commercial Real Estate Investors Can Make Profit

Commercial real estate investments have the potential to be profitable and act as a buffer against stock market volatility. The majority of returns for investors come from tenant rents. However, they can profit from property appreciation when they sell.

Direct Investment 

The greatest candidates for direct investments in commercial real estate are individuals who either possess substantial industry knowledge or have access to firms that do.

Indirect Investment

As an alternative, investors can make indirect investments in the commercial market by owning various market securities.

This includes real estate investment trusts (REITs) or exchange-traded funds (ETFs) that invest in stocks related to commercial real estate or by making investments in businesses that serve the commercial real estate market, like banks and realtors.

Advantages of Commercial real estate 

Attractive leasing rates are one of the main advantages of commercial real estate. The following are the advantages of commercial real estate;

• Income potential. 

The earning potential is the best justification for choosing commercial rentals over residential ones.

• Professional relationships.

Small business owners frequently take great interest in their enterprises and wish to safeguard their financial security.

• Public eye on the property. 

Retail tenants have a stake in keeping their establishments in good condition because doing otherwise will hurt their bottom line.

• Limited hours of operation. 

Most companies close up shop at night. That is to say, you are employed when they are. You should be able to rest without worrying about receiving a midnight call because a tenant needs repairs or has lost a key, barring emergency calls like fire alarms or break-ins.

• More objective price evaluations. 

Since you can ask for the current owner’s income statement and figure out what the price should be based on that, evaluating commercial property pricing is frequently simpler than residential property.

• Triple net leases. 

Although there are certain modifications to triple net leases, the fundamental idea is that the property owner is exempt from paying property expenses (as would be the case with residential real estate).

• More flexibility in lease terms. 

Contrary to the dozens of state statutes that apply to residential real estate, such as security deposit caps and termination guidelines, fewer consumer protection laws apply to business leases.

Disadvantages of Commercial Real Estate

While there are many advantages to investing in commercial property versus residential, there are also drawbacks.

• Time commitment. 

You have more to handle than a residential property if you own a commercial retail complex with five tenants or just a couple.

• Professional help is required. 

If you plan to manage maintenance concerns at a commercial facility, you need to be licensed, even if you are a do-it-yourselfer.

• More risks. 

Commercially zoned properties receive increased daily foot traffic from the general public, which increases the risk of accidents and property damage.

• Bigger initial investment. 

It’s frequently harder to get your foot in the door when buying a commercial property because it typically demands more money up front than buying a residential rental in the same neighborhood.

What distinguishes residential from commercial real estate? 

Private dwelling quarters are the only use for residential real estate. This is basically what individuals use as their abode or place of rest.

All real estate used for commercial purposes is referred to as commercial real estate and is used as public facilities where people produce services or easily access deliverables.

Commercial real estate may include Hospitals, manufacturing facilities, storage facilities, retail establishments, office buildings, and any other place for a business organization are examples of commercial real estate. 

Is it possible to earn valuable profits from investing in commercial real estate?

It is possible. Impressive returns and sizable monthly cash flows are possible in commercial real estate, and returns held up well during the market shocks of the previous ten years. Commercial real estate does, however, carry hazards, just like any other investment.

Commercial real estate investing can yield substantial profits, but it typically demands more skill and capital from investors than does residential real estate. 

Without having a technical understanding of the industry, anybody can indirectly invest in commercial real estate through publicly traded REITs.

In real estate, when you buy a house, you pay for the property, sign a standard purchase and sales agreement, and receive the deed for the land. It’s impossible for anyone to sub-buy the same property, making the transaction straightforward. However, leasing an apartment comes with a lot more flexibility and questions. One of which is the issue of subleases. A sublease is when a current tenant lets all or part of the property to a third party known as a subtenant. Although it is primarily an agreement between the renter and their subtenant, the landlord must give proper authorization.

Are you a landlord debating the pros and cons of subletting? Stick around because we’ll discuss the top 5 risks of allowing tenants to sublet in this article. 

Top 5 Risks of Subleasing

• No Official Agreement

The most significant risk of allowing your tenant to sublease is that there’s no formal agreement between you and the renter they’re bringing into your property. This problem alone presents several legal and contractual issues that might be a pain to resolve down the line. For example, if something breaks in the house, who pays for it? Such variables are inevitable once you allow subletting. Thus, reviewing your lease agreement with an experienced property manager would be best.

• You Can’t Screen Subtenants

Experts highly recommend screening your tenants before signing a lease with them. A thorough screening process allows you to identify high-quality candidates and stay away from difficult or ineligible applicants. However, when you agree to a sublease, you give up that control. Thus, you can’t say with certainty if the person living on your property is reliable or not. 

• Higher Risk for Property Damage

As a result of the reduced scrutiny, you also expose yourself to a higher risk of property damage. If your tenant doesn’t perform their due diligence, you could be letting a problematic renter on your premises. A careless or destructive tenant would rack up your expenses, and mediating such a situation would be difficult. 

• Insurance Policy May Not Cover It

Insurance policies are often strict on what they cover, and many do not make provisions for subleases. Even if you insist on tenant insurance, it might be hard to enforce such a policy on the person you sublet to. Thus, that leaves you with more exposure in the event of a fire, flood, or other significant damage. 

• Evicting a Tenant Can be Difficult

If the arrangement doesn’t work out and you decide to call it quits, you might find it challenging to end the lease. Evicting a legal tenant is a lengthy legal process, but removing a subletter is even more complex. Thus, reclaiming your property could be challenging, leaving you in an unpleasant situation. 

Pros and Cons of Allowing Tenants to Sublet

Pros 

• No Vacancy

It’s only appropriate for landlords to ask what is subletting and how it benefits me? One of the significant advantages of making provisions for a subtenant is that you don’t have to worry about vacancies. Instead of prematurely ending a lease with a tenant because they’re out of state, they can find someone else to take care of the rent. That relieves you of the time and money to find a replacement.

• Consistent Cash Flow

An absence of vacancies means your property is generating rent. Whether it’s a short-term lease where the subtenant is only staying temporarily or a long-term one that’s a complete replacement, your cash flow remains consistent. 

• Less Stress

Allowing a subtenant can also mean less stress for you. The original tenant has to assume responsibility for the renter they bring in, which shifts some of the burdens from you. 

Cons

• Rent Collection

Allowing a subtenant into the equation can sometimes introduce a middle man in the rent collection process. Any delay will inevitably become an inconvenience for you. 

• Increased Expenses

Giving your tenant permission to sublet can also increase your expenses. If you’re currently responsible for paying utilities such as water, gas, and electricity, you can expect the bills to go up with another person on the property. 

• Reduced Scrutiny

As we highlighted earlier, you can’t screen a subtenant. That reduced scrutiny creates uncertainties about the person’s ability to pay rent promptly and maintain the property. Besides, it could also mean more noise-related issues that make your other tenants complain.

Adding Sublet Clause to the Rental Agreement

After weighing the pros and cons, you might decide that subleasing isn’t bad. However, whether you decide to allow it or not, it is best to include a sublet clause in your rental agreement. Doing so protects owners from future problems like property damage or non-rent payment. 

If you choose to not allow subletting in your rental, the rental agreement must clearly state this. In addition, clarify any potential consequences tenants could face if they sublet without your permission. 

If you decide to accept subletting, be sure to list any special requirements or terms. In most cases, landlords will agree to sublet only when they can still screen the prospective renter and sign a binding agreement. 

Either way, you must then ensure that everyone receives a copy of the agreement and understands it is legally binding. 

Conclusion

The issue of subleasing comes with several pros and cons for property owners. On one side of the court, it guarantees a consistent income flow. It also means you don’t have to search for a new tenant or conduct a tedious rental screening process. On the other hand, reduced scrutiny could result in more tenant damage and less coverage for your property. Hence, it’s easy to understand why some landlords are against subleasing. 

However, proper planning is vital if you decide to proceed with such an arrangement. Draw up a document that includes all parties’ names, signatures, and terms of the sublease. Also, remember to add a section for security deposits to protect your property. If you need professional help, feel free to contact a reliable property management company that can oversee such details. 

Property managers are jacks of all trades. From screening tenants to addressing concerns and managing maintenance, there are no two days alike in the life of a property manager.

The past year has introduced new challenges in areas like social distancing, sanitation, and higher delinquency rates for unpaid rent. Here are some property management tips in 2022 to help you navigate a post-COVID-19 world.

The information below might also be very useful to those property managers who run businesses around full-time rentals for vacationers, travelers, and those frequently using VRBO or Airbnb. We know the world has been shut down for a few years, but with new surveys showing that travelers and vacationers are back in the air and making their way to new cities across America, it’s important to prepare your rental for what could be the return of travel in 2022 and moving forward.

Communication is Key

Communication is a crucial skill for a good property manager. Your role is to communicate with tenants to keep them up to date with new policies and simply to create a sense of community.

Keeping lines of communication open also gives tenants an opportunity to express their concerns or submit complaints. Listening to concerns and suggestions for improvement is something that helps you provide more value for your tenants.

If there is one piece of property management advice in 2022 that you need to apply, it’s seeking new ways to communicate. Here are some options to explore:

• Keep regular office hours so tenants know when and where they can find you.
• Upgrade your bulletin board with a color-coded system to improve visibility.
• Use social media to share updates and create a sense of community on digital platforms.
• Create an email list or use text alerts to share important information.
• Develop a set of best practices for handling conflicts and complaints.
• Think about automating some communication. You can, for instance, use a digital platform to collect rent and send automated reminders.

Presentation is Everything

Tenants have different priorities in a post-COVID-19 world. You should prepare for new questions and concerns about things like cleaning, sanitation, and social distancing.

Remember that presentation is a key element for attracting new tenants and keeping current tenants satisfied. Look for ways to make the property look cleaner, and don’t hesitate to make sanitation efforts more visible to tenants.

Don’t neglect things like decor, art, or a fresh coat of paint to keep up with new home design trends and make units more appealing to potential tenants.

Get Your Listings Noticed

Getting your listings noticed is one of the top property management tips in 2022. Here are some methods you can use to fill vacancies quickly:

• Craft eye-catching titles that highlight the unique perks your property offers.
• Hire a professional photographer to take high-quality photos of your property.
• Keep your description short and straight to the point. Use bullet points and white space to help users who are on mobile read this content.
• Update your listings to discuss new concerns and discuss the measures you’re taking to protect tenants from COVID-19.
• Make your listing unique by using an engaging tone and letting your personality shine through.
• Identify the best platforms for getting your listings in front of potential tenants. Ask how new tenants found your listing to get a better idea of which platforms generate the most leads.
• You can create different versions of a listing and use A/B testing to see which title or which copy results in the most leads reaching out to you.

Create a Process for Screening Tenants

Screening tenants can reduce turnover and lower your delinquency rate. One of the most important property management tips in 2022 is to develop a well-documented process you can use to screen tenants.

Here are some of the steps to follow to screen tenants:

• Ask the tenants to fill out an application. Include personal information, details about employment, and financial information.
• Find out who will live with the applicant. These people are co-applicants and should pass a background check.
• Obtain a written authorization to perform a background and credit check.
• Ask for referrals, ideally from previous landlords. You should also contact the tenant’s employer.
• Schedule an interview. Prepare a list of questions to get a better idea of the tenant’s personality and lifestyle.
• It’s best to document this process so you can be consistent with the questions you ask. Fair Housing rules require you to treat every tenant equally.

Use Data for Better Property Management

Data is a valuable tool for property management. It can give you better visibility over processes like marketing or customer satisfaction. Here are a few ideas for using data:

• Invest in an analytics solution to monitor the results of your different marketing campaigns and calculate their ROI.
• Track costs with accuracy. Reviewing costs linked to maintenance and other activities can help you spot areas where you could reduce spending.
• You can use data to screen tenants. Look at some data points for tenants with the best longevity to figure out the ideal income requirement for your screening process.
• Use qualitative data by creating a feedback survey. It’s a great way to assess whether tenants are satisfied with the property and identify areas that you need to improve.

It’s Time for a Skills Assessment

You’re no stranger to the fact that property managers need to possess a wide range of skills. With technology becoming more common in property management, it can be difficult to keep up with all the skills you need to master.

It’s time to perform a thorough assessment of your skills. Be honest with yourself and list the things you’re good at. Identify the areas where developing your skills would be useful and think about outsourcing some tasks so you can focus on the things you do best.

Document Everything

You need to develop an effective system for documenting all your activities. Documenting everything can come in handy in situations like legal proceedings, and having well-documented processes will make you more reactive when you need to adapt to a changing situation.

We recommend creating a detailed maintenance plan, a roadmap for growth, a tenant screening process, a tenant transfer policy, and a framework for dealing with delinquent tenants and evictions.

 If there are important tips for property management we learned from 2020, it’s that you need to turn sanitation into a well-documented process and have a go-to plan for possible future lockdowns.

Final Thoughts

These property management tips in 2022 will help you keep up with new trends and adapt to the new expectations and concerns of your tenants.

The most common complaints about home warranties consist of delays and denials. Many paying homeowners are unsatisfied because they do not seem to get what they are paying for. Frustration often takes over. Delays and denials for home warranty repairs cause discomfort to a family because of a malfunctioning home system. What are the causes of these setbacks? What could you do to avoid these common home warranty complaints?

Should you read home warranty reviews before you sign up?

Possible Cause of a Home Warranty Repair Delay

Calling your home warranty provider about a system breakdown in your home may result in a delay. A warranty company’s job is to connect the client to a local service technician to perform the repairs or replacements. The warranty plans provide financial protection and access to licensed professionals during unexpected repair and replacement costs.

During an emergency home warranty call, the warranty provider works with the customer to find an available and capable technician. That way, the technician can diagnose and focus on the breakdown right away. The provider can authorize the customer to find the technician outside its network if the company cannot find a technician within an appropriate time frame. Delays can happen if both provider and client cannot find a technician in the area. This can be a problem for expedite or emergency cases.

Possible Cause of a Home Warranty Claim Denial

Knowing why your home warranty claim was denied is the first thing you need to do. You can start this by reading the terms of your contract. This will determine which systems and appliances your plan protects. Denial is firm if the item does not have coverage. Below are the possible causes of your home warranty claim denial:

1. Exceeding coverage cap

Coverage cap is the limit your providers set on the amount they will cover. Your warranty company can deny your claim if the amount the provider will pay goes above the limit.

2. Incorrect installation

A home warranty provider can deny your claim if the installation of the home system or appliance was poor. The company can deny your claim if the installation violates safety codes. Damage to the system or appliance beyond natural wear and tear can also cause your provider to reject your claim.

3. Insufficient maintenance

Your provider may also deny your home warranty claim if there is an appliance or system with inadequate maintenance. That is why regular system and appliance checks are necessary. The technician will inspect the system or appliance during maintenance checks. The maintenance logs must be updated each time. The provider will deny the claim if the appliance is not working properly or not working at all.

How to Avoid the Refusal of Your Home Warranty Claim

Reading the terms, conditions, inclusions, and exclusions of your preferred plan can help you prepare well for your home warranty purchase. Knowing the requirements for extending your warranty coverage is also important. Reading and understanding everything can prevent confusion and unexpected surprises. Below are some of the main considerations you should remember:

•   The standard 24/7 assistance may take up to about 48 hours to get in touch with a service technician. See if your provider offers online claim filing. This is a convenient way to file your claim using the online forms.
•   Keep service and maintenance records accessible. Saving your home inspection report can help as well.
•   File your claim as soon as the appliance or home system breaks down. The cause must be normal wear and tear. Never try DIY replacements or repairs.
•   Finding out your provider’s coverage limit or cap will spark awareness if your provider does deny your home warranty claim.

Appealing for a Home Warranty Claim Refusal

You can appeal your refused warranty claim online. Calling your provider’s hotline can also start your appeal process. The company can help you complete your documents. Your provider can send the paperwork to your home address if the company does not have online links.

Avoiding a Home Warranty Claim Refusal or Delay Can Help You Maximize Your Plan

The goals of a home warranty coverage are to help you care for your home and save you from financial problems. Knowing your plan’s conditions, inclusions, and exclusions can prevent its denial. Learning how to find licensed repair technicians in your area can prevent any delay in your home warranty service. Completing your paperwork and understanding the plan you chose can help you get the most out of your home warranty.

Sources:

https://www.abc15.com/news/let-joe-know/how-long-is-too-long-to-wait-for-a-home-warranty-repair-even-when-its-considered-an-emergency

https://www.homewarrantyreviews.com/guides/guide-to-filing-successful-home-warranty-claims/

https://www.angi.com/articles/home-warranty-companies-rack-complaints.htm

https://blog.reviewhomewarranties.com/home-warranty-claim-rejection-and-how-to-avoid-it/

https://abc11.com/broken-hvac-units-troubleshooter-abc11-diane-wilson/1464437/

Bed bugs are pests, but they do not harm the structure of a home. Even so, they can still transfer harmful diseases. These insects are successful because they are too small to notice. Have you ever wondered why bed bugs are a serious problem to your health, furniture, and lifestyle?

A home overwhelmed with bed bugs will need the help of an exterminator. Knowing about the bed bug exterminator cost in your area will help you save for and schedule a treatment. Trained and experienced pest control professionals know how to handle a bed bug infestation. They have the right chemicals that can eliminate bed bugs but keep your household safe.

Bed Bug Infestation

The eggs of bed bugs are about the size of pinheads. They are pearly white when less than five days old. These eggs develop an eye spot if they are already more than five days old. The average lifespan of bed bugs is about six to 24 months. These minute insects feed every three days or even every week. They can also survive for months to about a year without any food supply.

These pests can thrive in shelters, hotels, dormitories, apartments, and homes. You can also find them on ships, trains, and buses. They are so small that they can get into even the cleanest of homes. Bed bugs can hitchhike and live in your closet, mattresses, boxes, and furniture. These pests are common in households whose members travel all the time or entertain guests.

The Problem With Bed Bugs

Having bed bugs in your home can be annoying, irritating, and hazardous to your health. These pests may not target the structures of your home, but they can interfere with your lifestyle. You need the expertise of exterminators if bed bugs are causing serious problems already. Here are some of the significant issues that you can face during a bed bug infestation:

1. Inadequate sleep

A severe bed bug infestation can cause severe itching and bites. This can lead to insufficient sleep. Even the thought of crawling insects on your skin will keep you up all night. This can leave you mentally and physically exhausted the next day. Insufficient sleep can result in appetite loss, lack of concentration, accidents, and heart diseases. It can cause family conflict and even low productivity.

2. Secondary infection

Bites from bed bugs tend to be itchy. They can lead to a strong urge to scratch until the itchiness fades. These pests often bite while you are asleep in the middle of the night. You scratch the itch unconsciously. Fresh wounds then appear in the morning.

Tiny open wounds may not be that much of a problem, but the infection caused by bacteria can be problematic. The wounds can expand without any treatment. The redness around the wound, tenderness, and swelling are symptoms of a bacterial infection of the skin. This can even lead to boils, cellulitis, and impetigo.

3. Stress and anxiety

It is not mentally healthy if you live in a household taken over by bed bugs. This can be frustrating and stressful. The home is supposed to be your sanctuary and place of rest. Constant bites and damage to the curtains or bedsheets can be disturbing. This stressful environment can lead to anxiety. Emotional and mental distress can lead to health issues and bad habits.

You can develop various infections, high blood pressure, and increased heart rate without the help of professional exterminators. Stress and anxiety can affect your digestion and state of mind. Any disturbance in the digestive system affects the immune system. This then leads to the onset of harmful conditions. This is why many people look for remedies for stress symptoms, such as by consuming delta 8 gummies and other THC products that help to relax them. 

4. Allergic reactions

Bed bug bites can trigger allergic reactions in some people. This could lead to life-threatening episodes. Anaphylactic shock may occur in people who have extreme allergies to insect bites. Tightness of the chest, wheezing, throat constriction, itchy lips, and tongue swelling will need medical attention right away.

A Bed Bug Infestation Can Lead to Serious Problems Without Professional Help

Bed bugs do not cause significant structural damage to your home. They do affect your health and lifestyle on a deeper level. You can suffer from severe mental and emotional disturbances. These will then trigger physical disorders. Seeking the help of trained and experienced bed bug exterminators will help prevent these disorders from worsening into life-threatening conditions.

Even if you’re just getting started in residential real estate, it can’t hurt to understand a bit of the commercial side as well.

And if you’re looking to get into a new lease or interested in getting started with commercial real estate investing, then you should know how different lease structures can affect you. Understanding the amount of management required in each lease structure is vital for new investors to know how “passive” each opportunity is. The level of management you want to deal with depends on which structure you go with, whether or not the building is full of tenants. Maintaining and managing the property can be expensive and timely, so how can you know which structure can work best for you?

This page will give you a brief introduction to these two lease structures and help you understand how each one can work for you and your desired level of risk and return. By breaking down the two structures, you’ll see the positives and negatives of both. 

What’s the difference?

The main difference between these leases is who pays for the commercial property’s common areas and maintenance expenses. This includes covering the maintenance and expenses for lobbies, parking lots, elevators, and more. In addition, the amount of management over the property depends on which one you choose. 

What is a Full Service Gross Lease?

In this lease, the tenant has a monthly rental amount paid to the landlord, and the landlord pays for all of the property’s expenses. Usually, in this model, the base rent for tenants is higher, so the landlord can use the additional money on common area maintenance and other expenses. 

Pros: For the investor/landlord, rent rates are higher, which can translate to increased profit for you. However, there is a clear definition of who is responsible for extra expenses and maintenance of the property for the tenant. 

Cons for the tenant: Ultimately, the central unappealing aspect of this structure is the increased cost. Generally, rent payments in this model are usually higher than ones in a NNN lease. 

Cons for the investor/landlord: If taxes, premiums, or other costs go up, those costs need to be covered by you. Since the rent payments are determined by the lease, a landlord cannot immediately raise rent to meet the increased expenses. 

What is an NNN Lease?

Unlike the gross lease, this rent structure bundles the standard rent payment for the tenant with calculated percentages of the property taxes, building insurance, and building maintenance expenses. The calculated percentage of the additional expenses is outlined in the lease agreement and is usually based on the amount of square footage the tenant leases. These leases are common in bank branches, drug stores, and quick service restaurants because of how easily a majority of the responsibility can be passed on to the business owner or tenant. 

Pros: For the tenant, this means by only paying your share, you can usually see lower rent payments. For the investor/landlord, passing on rising expenses and maintenance costs to the tenant can increase the net income you could make. 

Cons for the investor/landlord: With this model, the landlord can have a more challenging time managing the property. It can be difficult to reconcile your actual expenses and those that are recovered by the tenant. 

Cons for the tenant: Even though rent can start low, you can potentially expect your rent to increase if expenses rise. In some cases, covering your share of the operating costs of your building/property can leave you with higher rent prices than a standard full-service gross lease. 

What you need to know before signing

Whether you’re signing a new lease or getting started in real estate investing, there’s a lot you need to consider before signing. No one option is wrong, but both have their appeals. For the tenant, a Full Service Gross Lease can be an appealing option because of its simplicity and that the rent payment will be the same until your lease ends. The bulk of the responsibility falls upon the landlord in this structure. Depending on the amount of involvement you want in maintaining your property, full-service gross leases won’t be very passive income. 

For a more passive approach, NNN leases tend to pass off some of the burden to the tenant. This structure tends to be more popular among investors since they are considered to be low-touch assets. That means that while the tenant covers most if not all of the costs, you can pursue other investment opportunities. 

If you want to read more about real estate investing and lease structures, consider checking out First National Realty Partners’ blog on the subject.

The air quality of your home is more important than many people realize. If you have young children, the quality of the air in your home can affect their health and physical and mental development.

Read our guide to find out what you can do to improve the air quality in your home and protect your family.

Keep it Clean

House cleaning and domestic chores can be a real pain. It feels like a job that never ends as there is always something that needs to be done to keep your home clean and tidy.

It is incredibly important to do, however, if you want to improve the air quality in your home. Dust and dirt are the primary air contaminants in any space, and the rooms in your home are no different. Try implementing a cleaning schedule in your home to make sure you stay on top of all of the chores. This can be great if you have children, as you can give them regular tasks to complete to help them maintain the home they live in and improve the air quality, which will benefit them the most.

Add Plants that Naturally Purify the Air

Plants can be very useful if you want to improve the air quality of a space and deal with odors. They can also add color and texture to your decor.

Not every plant offers these benefits. Flowers can actually decrease the air quality of a space by contaminating it with pollen, which can affect people with allergies and asthma, and by attracting insects or pests that can cause further problems. A great plant for air purification is Aloe Vera, which is also easy to maintain and very fashionable at the moment as it is a succulent plant. 

The leaves of the Aloe Vera plant have a large surface area, and so they absorb a lot of carbon dioxide from the air and release a large amount of oxygen for their size. They also have natural antibacterial properties, which is why it is used so much in hand soaps and natural cleansers, and this helps clean the air in the spaces they inhabit.

Invest in Air Purifiers and Fresh Filters

Air purifiers are a great addition to the home if you are suffering from poor air quality or struggling to deal with odors. 

A small air purifier is quite capable of purifying the air in any room or even a kitchen space and can give you the extra boost you need to get better quality air in the home. If you have air conditioning in your home, you should check your filters and replace them regularly. These can become blocked with contaminants over time and these particles will find their way around your home. Taking this simple step can improve the air quality in your home massively.

Clean Furniture and Fabrics Regularly

The furniture in our homes, such as sofas, chairs, and mattresses, can become magnets for dust, dirt, and contaminants. Regularly cleaning these furniture items should be one of your household chores if you want to improve your air quality.

Steam cleaning and vacuuming can be very effective at combatting this. You should also take some time to investigate what your home furnishings are made from. Some sofas and mattresses, particularly older ones, have been made with materials that can degrade over time and release toxins into the air. There are some modern mattresses available that are made from non-toxic materials and work at improving air quality while you sleep! Check what your mattress is made from and make sure you are getting the best possible air quality while you rest.

By taking just a few of these steps, you can make a massive improvement to the quality of the air in your home and reduce the number of airborne contaminants that can affect the health of you and your family.