There are many things to consider when you rent out a commercial building to a tenant. Factors such as the condition of the property, as well as the location, will lend to the amount that you can feasibly charge for your building.
When market conditions change or you experience an increase in expenses related to your property, you may wish to increase the rent. Most rental increases are written into the lease and occur every couple of years. It is important to let your tenants know what they can expect in terms of their lease and when they can expect rent to increase.
Below are some common examples of types of leases with rental increases included.
Triple net lease option
According to FindLaw, a triple net lease means that your tenant pays rent, but they also pay you for other expenses as well. These expenses usually include costs for repairs, insurance, utilities and taxes.
Double net lease option
Similar to a triple net lease, a double net lease includes the rental amount, taxes and insurance. Under this lease, you are responsible for other expenses.
Net lease option
This lease requires your tenant to pay for all the same expenses as a triple net lease. The difference is, however, that they pay the expenses themselves. Under a triple net lease, you pay the expenses and then collect from your tenant.
Gross lease option
Under a gross lease, you pay for all expenses as the landlord. You would usually charge your tenant a higher amount of rent, however, because all the costs are included in the rent payments.
Whichever lease option you choose, be sure to make sure your tenant understands the costs associated with renting the property.