American landlords generate an average of $10,000 or more in passive income annually. If you're starting your journey as a real estate investor, learning the commercial rental process is a critical first step toward success.
Here, we'll discuss the basics of lease management for commercial property owners in Texas. Read on to maximize your ROI in McAllen, TX.
Draft Leases the Right Way
There are four common types of commercial leases. They are:
- Gross leases, where the tenant pays one flat monthly fee that covers rent/utilities/taxes/insurance
- Net leases, where the tenant pays a smaller fixed rent as well as additional fees to cover rent/utilities/taxes/insurance
- Variable leases that change depending on market conditions specified in the Consumer Price Index or according to a pre-decided increase schedule
- Percentage leases that charge both a fixed rental rate and a percentage of all the profits the business renting the space makes in any given month
Once you decide on a lease type, it's time to begin the commercial rental process with a well-constructed lease. Make sure to include:
- Rental rates
- Utility and maintenance responsibilities of both landlords and tenants
- Payment terms
- Payment frequency
- Security deposit sums
- Late fees and penalties
- Property rules tenants must adhere to
Expert property managers know how to make all documents legally binding to ensure compliance.
Leverage an Integrated Lease Management Platform
Keeping all your documents organized can be challenging, especially if you own several commercial properties. Luckily, an all-in-one lease management platform can help streamline property management strategies.
You can:
- Easily access the leases from your smartphone
- Send out rent reminders to tenants
- Send out new leases to commercial tenants looking to renew
- Collect all signatures and documents in one place
Commercial tenants can:
- See the lease on their own devices
- Zoom in on clauses for easy readability
- Make commercial property maintenance requests
- Send out automated payments
- Review and sign updated or renewed leases
McAllen property managers offer these platforms for easy landlord and tenant access. We also do all the dirty work of sending out rent and renewal reminders so you don't need to keep track of and manually execute tasks.
Focus on Lease Renewals and Long-Term Tenants
Keeping good tenants costs less than signing on new ones. It's less risky because you know what to expect from them. You also won't need to worry about vacant properties.
You may want to:
- Prioritize tenant communication on secure platforms
- Offer incentives like gift cards or decreased rent for long-term tenants
- Reduce vacancies by marketing lease renewals
- Be open to negotiation with long-term commercial tenants
Streamline the Commercial Rental Process in McAllen
Now that you know the ins and outs of lease management, it's time to turn the highest possible ROI from your Texas real estate investment.
PMI RGV offers a wide range of services including drafting leases and improving tenant relations. We're committed to providing an all-in-one platform for easy lease access and streamlined renewals at the end of leasing periods.
Request a free rental analysis to learn how much you could profit from your McAllen, TX rental!
