Rental properties can be a very lucrative way to make money--if you know what you're doing. If you don't know how much you should charge for commercial rent on your property, then find out. With a few research methods and an understanding of what you need to know, anyone can find the right price to potentially start making a tidy profit.
Research Property Values and Rent Costs
Start by researching property values in the area where your property is located. Many, many realty sites allow you to search for residential and commercial properties by postcode. Get an idea of how much your property is worth to start estimating how much you'll need to charge for rent.
More desirable or upscale areas of town can command higher prices, while you're unlikely to get larger rents in areas where properties are sold at more affordable rates. Include other commercial rental properties in your search to find out what other property owners are charging; you'll need this data in order to establish your own competitive rates.
Calculate Your Expenses
The amount of rent you charge on your commercial property must be enough to cover the cost of owning that property. Use a spreadsheet to create a comprehensive budget, so you have a good grasp of how much your property will cost you. Calculate any regular maintenance costs that are your responsibility, which could include roof and building repair, lawn care and other fees. Know how much your property will cost you per month and per year to know what you should be charging in rent.
Calculate the Value of the Rental Agreement
The rental agreement you offer has a value of its own, so take this into account when you're determining rent costs. What bills and maintenance fees will be the renter's responsibility to pay? The more your commercial renters must pay on building costs, the less they're going to want to pay in rent. Any extras you might offer (cable television, for example) can command higher rental rates.
Determine the Value of Your Property
To determine how much you should charge for rent on your commercial property, put all the aforementioned factors together and then make your final calculations. The size of the property (square footage), condition of the building (age and general physical shape) and the amenities offered will all have a huge factor on how much rent you'll charge. A property that includes a large parking area, for instance, will command more in rent; a property with a covered garage can charge still higher rents. Again, look to your competitors and to other properties to get a comprehensive idea of your property's worth.