Is a Long-term lease beneficial when property is scarce?
Category Newsletter: Ceo's Message
In South Africa, securing a long-term lease when property availability is scarce can offer several benefits:
1. Stability: A long-term lease provides stability for both the tenant and the landlord. Tenants can have peace of mind knowing they have a secure place to operate their business for an extended period. Landlords benefit from consistent rental income without the hassle of frequent turnover.
2. Annual Escalation Negotiation: With a long-term lease, tenants can negotiate a reduced escalation percentage in their rental rate for the duration of the lease. This can be particularly advantageous in areas where rental prices are rising rapidly.
3. Avoiding Displacement: In a tight rental market, finding a new property can be challenging and time-consuming. A long-term lease ensures that tenants won't face the risk of displacement due to the property being sold or the landlord deciding not to renew the lease.
4. Customization: Long-term leases often provide tenants with the opportunity to customize the space to better suit their needs. This could include making alterations or improvements to the property, knowing they will have sufficient time to enjoy the benefits of these changes.
5. Good Relationship: Establishing a long-term relationship with a landlord can lead to mutual trust and understanding. This can be beneficial for both parties, as it may result in more favourable terms or accommodations over time.
6. Integration: Long-term leases allow tenants to become more integrated into their node, this can lead to a good area footprint.
Overall, securing a long-term lease in a market with limited property availability can provide tenants with stability, predictability, and peace of mind, while also offering landlords a reliable source of income and a chance to build lasting relationships with their tenants.
Author: Marder Properties
