Tag: commercial leasing

Ways to Finance an Investment Property

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The world has gotten to the point where every income-oriented person is always looking for ways to make extra income, whether passively or actively. Many people love having passive income streams because they give them the chance and time to work on a lot of other things, especially if they have a regular job. One of the best ways to earn passive income is through investment property. And besides providing you with a source of income, you can increase your assets, stabilize your financials through investment property.

However, knowing how to buy an investment property in your name is always the first step. Buying the property is the hardest part, except, of course, you already have the cash lying around in the bank or a rich family member who is going to give you the money. If you are just an average Joe who wants to invest in properties, below are some options that you can use to finance an investment property.

  1. Apply for a bank loan

For investors just starting out in the world of investing, getting a bank loan is the most common go-to option. The only difficulty that many of these investors grapple with is the insistence of banks on up to 30% of the property’s value as a down payment. This could be a bit difficult for an investor who is just getting into the business. Some of the other limiting factors, including poor credit scores and a bad debt-to-income ratio, which make the banks tag them as bad bet and refuse them loans.

But if you can swing it, a bank loan is one of the best ways to finance an investment property. You can get good rates, and once the property begins to yield some income, servicing the loan becomes easy.

  • Tap into your home’s equity

Financially, we do not usually advise using your existing home’s equity, but if you are trying to buy an investment property, it could be a great idea. You have different options, which include using the home equity loan to get the amount you need or extending your mortgage or even cashing out all the equity that you have on your home. Whichever it is you choose, this is a viable option to finance your investment property.

  • Get a hard money loan

Not all investment properties are meant to be kept long-term to yield income. Sometimes you can get a “hard-money” loan in which the property will serve as the security. Lenders that provide loans like this will use the after-repair estimated value of the property to determine their risk. This kind of loan does not use your credit score or debt-to-income ratio to check your loan eligibility.

If you have your sights set on investment property and the whole process is overwhelming for you especially in the area of financing, it is time you talked to experts. Get in touch with Chang Legal LLC Attorneys at Law. Call 847 907 4971 to talk to a lawyer.

Do this before signing a commercial lease

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Signing a commercial lease involves having a clear picture of what you are about to sign. It may like too much work, but in your best interest, do your due diligence before putting pen to paper. Make sure you ask questions, read the lease agreement word by word and line by line. Do not assume the content of the lease because, most times, it does not contain the things that you expect.

Check below for tips on how you can protect yourself when signing a commercial lease. Doing these things will help you understand what you are getting into better and also avoid misunderstanding or trouble with your landlord. Let’s get to it;

  1. Read the lease over and over

The first thing to do when you receive the lease papers is to create time to read them. Maybe you have discussed some things with the landlord before, such as reducing the cost of the lease or providing certain utilities as part of the lease. Whatever it is that you may have discussed with him or her, read the lease to make sure he or she has included it in the written lease agreement. Also, check the leasing date and every other term that you negotiated to see if they are in writing. Do not take the word of your landlord for it. Anything you want your lease payment to cover, make sure the landlord puts it into writing. This way, you will be preventing future arguments.

  • Understand the lease terminology

It is one thing to read a lease agreement while it is another to get a full grasp of what you have read. There are numerous terminologies that lease agreements contain, which may be outside of the regular dictionary. Do not assume the meaning of a word. Make sure you understand the full meaning of every word you read in the agreement. If you need further help with interpreting a lease agreement paper, get in touch with your property attorney at Chang Legal LLC Attorneys at Law.

  • Is the lease flexible?

You should factor in some uncertainties or eventualities beyond your control. If, at some point, you decide to move your business elsewhere or sell your business, can you sublease the facility? You should put these into consideration and discuss them with your landlord so he or she can include them in the lease terms.

  • Work with your attorney

Your attorney is the only person that you should trust when signing a lease or contract. Your attorney is well-grounded in the law and will spot any unfair or unreasonable term in your lease agreement. Involving your attorney will help you stay ahead and avoid any issues in the future.To ensure that you have a good tenant-landlord relationship, take time to understand your lease and do not be blindsided into signing something you do not understand. Chang Legal LLC Attorneys at Law is the best you can work with when signing a commercial lease. Call 847 907 4971 to talk to a lawyer.

Commercial Lease Rates

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It can be difficult to understand how commercial lease rates work when you are looking to lease a commercial property. Since every situation is unique to every other, it may be confusing when you are comparing multiple properties to lease. It is essential to understand the factors that are associated with this, such as the current market, the size of the property, and what the preferences of the landlord are. Chang Legal is here to help you recieve a better understanding of commercial lease rates and what to look for when you may be considering leasing a commercial property.

Rates Per Month Or Year

When you lease a commercial property, there are many similarities as you would lease a residential property, such as fixed monthly or yearly rates. Monthly rates may work as simple as $2.00 for every 6,000 SF, which would be around 6,000 dollars per month. However, many landlord use a fixed yearly rate when leasing a property, such as $25 for every 6,000 SF, which would be around 100,000 dollars annually.

Gross Lease

In a gross lease, most of everything is all included within the fixed rate of the lease. This means the renter will not need to pay any of the maintenance, insurance, taxes, or any other type of fee associated with the property.

Triple Net Lease

In a triple net lease (NNN), the renter will usually have to pay a lower based rate for the property, as well as pay for all the fees that may come with the property. This includes maintenance, insurance, taxes, and any other type of fee that may come with the property.

When you are looking for a commercial space to rent, it is essential to know all of these things and knowing what you are responsible for once you sign the contract. It is crucial to contact a real estate attorney, such as us at Chang Legal, to ensure you know all the details associated with the lease. To learn more and how we can support you through your real estate questions or concerns, contact Chang Legal today.