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How Commercial Property Benefits Landlords

How Commercial Property Benefits Landlords

If you want to be a landlord, consider how commercial property could benefit you.

A landlord has options when it comes to real estate. He can take on either residential or commercial properties, with plenty of subsets within each category. While there are numerous benefits in managing residential real estate, commercial property also has its benefits for landlords. See below a few reasons why commercial real estate might be a better fit for you.

Higher Rent

Commercial property does not have the same set of rules as residential property, and these differences can be beneficial to both the landlord and the tenant. For example, Maryland law limits rent increase; unless stated in the lease agreement, a landlord cannot increase the rent during the lease. Requirements differ from county to county. However, in commercial property, a landlord may be freer to increase the rent during the lease. Because fewer restrictions apply, tenants and landlords can negotiate rent more liberally for their best interest.

Long-term Tenants

Another benefit one can enjoy from leasing commercial real estate is the greater stability in tenancy. People may move in and out of residential units as life changes, but businesses want a long-lasting relationship with a shopping center or other like setting. If the business is happy, there is little reason for them to move. Commercial leases tend to last several years or more and come with a deposit and possibly a fee for the upkeep of common areas, even the parking lot.

Property Improvements

Landlords can expect their commercial properties to improve and keep well-maintained with the right tenants. Any tenant would want their business to succeed, and part of the success comes from a great-looking store. Tenants often put much into their units themselves, and often get a period early on to outfit it according to their needs. The landlord likely will not have to worry so much about tenants abusing the property.

Exclusivity Clause

Landlords can benefit from charging their tenants in various ways, such as a few months’ worth deposit, tenant liability for damages, and “acceleration.” However, one can also add an exclusivity clause, which protects both the landlord and the tenant from competition. For example, the landlord will agree not to put a similar restaurant in the same strip mall as their tenant. The tenant, in turn, will agree to move to a location outside a specified radius when the time comes to avoid competition.  

Trust the Professionals at Clagett Enterprises for Your Realty Needs

If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook, Twitter, and Pinterest.

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