Looking for a new place to rent can be challenging, especially when rental prices can vary drastically from one property or area to the next.
When you find a commercial property to rent, you will find out there are several reasons why some may be higher in rental and some may lower. How much you pay in monthly rent depends on a wide range of factors. Find out the 7 factors now!
1 Location
Main factor influencing commercial property rental is a property’s location. The location will establish a baseline rental rate, overall demand, and target market. For instance, the rental of a shop in a city is higher than in a village.
Before you buy or rent a commercial property, you will need to evaluate the area if you aren’t familiar with it.
2 Age and Condition of the Commercial Property
Another factor influencing commercial property rental is the age of a property and how well it is maintained. A new property in a popular area, with steady demand, will certainly request a higher rental. When the property became older but still maintained well, the rental could remain steady over the years.
But a 30 year old building often comes with problems, such as appliances that are past their life expectancies (air conditioner, furnace/boiler, water heater), foundational issues, and out-of-date construction. Therefore, the rental may decrease in terms of this factor.
3 Infrastructure, Amenities, and Future Development
Commercial properties well connected to the city centre or hot property spots would have higher demand than properties further away. Big infrastructure projects, such as new transport links, new development, well-planned mega townships, or mixed-use developments by renowned developers, tend to drive up property prices in the area, which in turn affects rental prices.
This is because the area is high-traffic where they have the most visibility.
4 Vacancy Rates
Areas and properties with lower vacancy rates are usually priced higher. When areas and properties with higher vacancy rates are usually priced lower, this same goes to = Supply > Demand. That’s why the rental of the commercial property will be higher than commercial property in other areas.
5 Size of the Commercial Property
The fair market value of a property is often determined by its size. A 1,600 square feet shop, for example, monthly rental is RM 9,400, therefore, be worth RM5.88 per square feet. Needless to say, the larger your property, the more money you will be able to get from renting it.
6 The Interior and the Exterior of the Property
In case you aren’t aware, the attractiveness of your exterior and interior property is one of the most significant factors that can affect your commercial real estate’s value. If you have peeling paint, pipe leakage, cracked concrete, or any combination of these things, your property’s monthly rental price can decrease significantly.
7 Safety
In terms of safety, local crime rates can have a big impact on a property’s vacancy rates, reputation, and the amount of rent of a commercial property. If the area has a high crime rate, the rental price of the commercial property will decrease, and even worse, no one will rent the place for business.
As you can see, there are many factors influencing rental prices. From location to unit size, rental price may be influenced by many factors. To find a rental that best suits your requirements, we may search for the best commercial property that is most valuable to you.
Click the button below to reach us.
Comments