Considerations When Purchasing Pre Leased Real Estate
Location The most important factor determining the value of any real estate asset is its location. Investors interested in pre-leased office space should consider investing in a city's central business district. Investors looking for pre-leased retail shops and banks should consider investing in areas with better public transportation accessibility (preferably on the main road), high footfall, and good frontage. If you plan to sell the property, a prime location will always command a higher price and result in a shorter turnaround time. The value of an asset will always be determined by its micro-market and the city in which investors choose to invest. Lease Conditions Make sure the lease is for an extended period of time, as finding new tenants is a difficult and time-consuming task. Longer lease terms ensure the asset's stability. Banks, for example, typically have long lease terms that ensure consistent and reliable returns. Rental Income Rental yield indicates return on inv