Pre-leased or pre-rented commercial properties are those which already have tenants in them and generate monthly rental income. These properties are generally occupied by small to big business owners, as tenants. Some pre-leased properties are also occupied by MNCs and renowned companies.
Low Risk of Preleased Property
Pre-leased properties come with reduced risk compared to buying a vacant property. The tenant is already in place, and the property is generating income, which lowers the investment risk significantly. Banks and financial institutions often view pre-leased properties as less risky, making it easier to obtain loans.
Loan On Preleased Property
LRD or Lease Rental Discounting is the loan taken against rental receipts of your pre-leased commercial property. The loan EMIs are paid by the tenants through rental income of the commercial property without you having to pay it yourself.
Calculation of PreleasedProperty ROI
ROI = (Annual Rental Income / Total Investment) x 100
Additionally, investors should consider other factors, such as the duration of the lease agreement and any additional expenses, while calculating the ROI on a pre-leased property.
Re-Sale of Preleased Property
When property owners plan to sell a property with tenants, they may wait for the lease to end. However, there may be scenarios where a property owner finds a prospective buyer with an attractive deal. Legally, a landlord can sell a property with tenants in it
How to Convert to Preleased to Freehold
To convert a leasehold property into freehold the lessee has to acquire ownership of the property first. You need to possess important documents such as a search report, sale agreement, and sale deed. But if your property is on government leased land you need to seek permission from authorities.
Can Pre-leased Property to be Transferred
Lessee has the right to transfer either absolutely or by way of mortgage or by subletting, the whole or any part of his interest in the property. Lessee shall not be treated as independent from the conditions of the lease, for the purpose of this transfer.
ROI in Ahmedabad on Preleased Property
In Office : 5.50% to 7.5%
In Shops of Retailing : 3.50% to 5.0%
In Branding Show room, Metropolis offices, Banks etc : 4.50% to 7.00%