Commercial Property Lease Lagos Nigeria - Free Commercial Real Estate Lease Tips
However, commercial property lease in Lagos Nigeria differs from residential apartment lease in three key aspects.
Commercial Real Estate Lease - An Overview
Commercial property lease tend to be more expensive than residential apartment lease because, more often than not, commercial properties are in strategic locations. Therefore they attract higher rental prices.
Consequently, when you compare the total cost of the lease of a commercial property with that of a residential property in the same neighourhood, you will find the prices are miles apart.
Legal Agreement Between The Owner And The Tenant
The procedure for renting an apartment in Lagos Nigeria, commercial or residential, is as follows:
1. Contact Lagos Nigeria real estate agent
2. Inspect property recommended by estate agent
3. Meet the owner, if you like the property
4. Pay for property
5. Sign the lease agreement
6. Prepare the property (e.g. cleaning, painting if necessary etc)
7. Move in
Notice that the signing of the lease agreement comes after payment for the property in the list above.
That is exactly what individuals do . . . they pay for the property before even sighting the lease agreement presented by the owner.
If you're a business getting into commercial property lease, be sure to read the lease agreement and understand the terms before making payment for the property.
Remember that the agreement is binding after you sign your business to it. So, be sure to read it and agree to the terms before committing cash to the transaction.
Of course, after you pay for the property, both parties will then sign the lease agreement.
Leverage Your Cost With Long Lease
While long commercial property lease may not be the ideal option for most businesses, it may be the perfect solution for others.
For example, if you run a restaurant, school business, or any such business that requires substantial capital to begin or one with a clientele located within a geographical area, it may make perfect sense to secure that location for a much longer time than two years.
For instance, when a school located within a particular area relocate its premises, they often lose a sizeable number of their students. The same applies to a fast food joint located in a central commercial hub. Relocating the fast food business may sometimes mean starting from scratch again. Not the kind of dream that makes a businessman happy.
In this particular situations, long lease may benefit your business in two significant ways:
1. It gives you sufficient time to recover your overhead costs and become profitable and
2. It locks down the rental price of the house year on year for the duration of the lease
About rental price lock-down.
Many people in Lagos Nigeria will tell you that rental price increase at a rate of about 10-15 percent year on year.
This does not mean landlords or home owners take 10-15 percent price increase every year. What they do is to increase prices every two to four years. But when you work this price increases backward, you will find it translates to 10-15 percent price increase year on year.
Therefore, when you take a long lease of 5-10 years on a property, you lock down the price of that property within that time frame. Hence, the property owner cannot legally increase the rent of the house. This saves you good money.
Another good thing about long commercial real estate lease is this . . . property owners are usually willing to accept lower rent from long commercial real estate lease tenants because this class of tenants provide them much needed investment capital for their next investment or capital to off-set a mortgage payment for their new property.
This is a true win-win situation!
Should you go for long commercial property lease?
It's up to you.
If your business profitability and sustainability depends on it, then go for it.
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