Abdul-Jaleel Ayuba’s Post

SERVICE CHARGE IN THE REAL ESTATE SECTOR >>> Service Charge is a fee charged by landlords to tenants in commercial properties to help in the upkeep of the property and the various equipment installed in the property.   >>> It is a recovery charge for common services that are provided in properties for the benefit of all tenants and users of the property. They include but not limited to: Security, Cleaning, Insurance, Repairs and Maintenance, etc. Expenses such as: capex, marketing, interest on mortgage, profit mark-up, etc, are excluded from Service Charge calculations.   >>> It is usually calculated as fixed fee per unit or square metres, and billed to tenants together with the rent charges (i.e. on quarterly or bi-annual basis).   >>> It is a win-win arrangement where the landlord (through its property manager) arranges and provides for these services for the benefit of the tenants so that they can concentrate on their core business activities. The landlord in turns gets the property well-maintained and value appreciated over time.   >>>Typically, the landlord pre-finances for the services and then bill the tenants for refunds.   >>> It is estimated at the beginning of a period (usually the financial year of the landlord) and then reconciled at the end of the period.   >>> The rule of thumb for Service Charge determination and accounting is TRANSPARENCY.   >>> Service Charge Recovery Ratio is a key performance indicator for a property manager, and it’s calculated using the formular: (Service Charge billed/Actual Service Cost)*100%. #Service_to_fresh_accountants)

*Why Property Investors Should Not Bypass Their Channel Partners* 1) 📊 Expertise and Market Knowledge * 📈 In-depth Market Insights: Channel partners have a deep understanding of the local real estate market, including pricing trends, upcoming developments, and prime locations. * 💡 Valuable Advice: They can provide valuable advice on the best investment opportunities tailored to your specific needs and goals. * 🔑 Access to Exclusive Deals: Often, channel partners have access to exclusive deals and early bird offers that are not available to the general public. 2) 🛠️ Professional Guidance and Support * 🔄 End-to-End Support: Channel partners offer support throughout the entire process, from property selection to post-purchase services. * ⚖️ Legal and Financial Assistance: They can assist with the legal and financial aspects of the transaction, ensuring all documentation is accurate and compliant with regulations. * 🛡️ Problem Resolution: Channel partners act as intermediaries to resolve any issues that may arise with the builder, ensuring a smoother transaction. 3) 🎁 Value-Added Services * 🔍 Customized Solutions: They provide personalized services based on your investment criteria and preferences. * 🤝 Negotiation Skills: Experienced channel partners can negotiate better terms and prices with the builder on your behalf. * 🔧 After-Sales Service: Many channel partners offer after-sales services, including assistance with property management and rental services. * 🏡 Resale Services: Channel partners can also assist with the resale of your property, ensuring you get the best market value. 4) 💸 Cost Efficiency * 🔍 Avoiding Hidden Costs: Channel partners can help you avoid hidden costs and ensure transparency in pricing. * 📈 Better ROI: The expertise and services provided by channel partners often result in a better return on investment in the long run. 5) 📜 Ethical and Professional Practices * ⚖️ Ethical Conduct: Reputable channel partners adhere to ethical standards, ensuring that your investment is secure and handled professionally. * 🔒 Accountability: They are accountable for their services and performance, providing a layer of security and trust that is crucial in real estate transactions. 6) 🤝 Respect for Services Rendered * 🔍 Understanding Value: Few investors focus more on the brokerage fee of the channel partner rather than appreciating the investment and hard work involved before and after booking. Everyone has their needs to fulfill and should respect the services provided. * 💼 Fair Compensation: Consider how you'd feel if someone didn't pay for your services. Channel partners deserve fair compensation for their expertise and efforts. *Conclusion* While it might seem tempting to bypass channel partners to save on brokerage fees, the benefits they bring to the table far outweigh the costs. Www.nestowl.in Team The Sahil Nest 87080 49539

After the recent (NAR) settlement, real estate professionals may face an evolving market and regulatory landscape. Here are several key reasons why growing a real estate business in this environment is more important than ever: 1. Increased Competition Growing your business ensures you stay ahead of competitors who may now be forced to differentiate themselves through enhanced services or better client experiences. 2. Shift in Commission Structures The NAR settlement may lead to changes in how commissions are disclosed and negotiated, impacting how agents are compensated. Expanding your business allows you to build more transactions, increasing your income even if commission rates shift. 3. Client-Centric Approach is Critical As more details about commissions and costs become visible to clients, agents must focus on delivering superior service and value to retain clients. Growth enables agents to invest in better technology, marketing, and client engagement strategies that can enhance the overall customer experience. 4. Adapting to New Regulations The settlement will likely bring new rules and regulations, requiring agents to stay compliant while also being flexible. 5. Leverage Technology for Efficiency In a more transparent market, technology will play a crucial role in attracting and retaining clients. Growing your business allows you to adopt advanced tools like CRM systems, digital marketing strategies, and data analytics to streamline operations and stand out in a competitive marketplace. 6. Brand Reputation and Trust With new rules governing transparency, building a larger, more reputable brand will be key. A strong reputation helps gain the trust of both buyers and sellers, who may now scrutinize agent practices more closely due to increased transparency. 7. Diversification of Income Streams The settlement may reshape how agents and brokers earn their income. Growing your business can create new opportunities such as offering consulting services, investing in property management, or expanding into new markets, providing more financial security. 8. Take Advantage of Market Opportunities As the real estate industry adapts to these changes, there may be opportunities to acquire market share from agents or agencies unable to adjust. Growth-minded agents can seize these opportunities to expand into new areas, secure more listings, or develop partnerships.

Landlords who can't effectively track their properties may face various challenges, including: 1. Rental Income Management: Difficulty keeping track of rent payments, late fees, and arrears. 2. Property Maintenance: Overlooking maintenance and repairs, leading to property deterioration and potential safety hazards. 3. Tenant Management: Struggling to monitor tenant agreements, lease renewals, and potential issues like damages or disputes. 4. Financial Planning: Inability to accurately forecast income, expenses, and tax obligations. 5. Legal Compliance: Risk of non-compliance with regulations, such as health and safety standards or tax requirements. 6. Vacancy Management: Failing to promptly address vacancies, resulting in lost revenue. 7. Insurance and Liability: Overlooking insurance renewals or policy changes, potentially leading to inadequate coverage. 8. Tax Audit Risks: Inaccurate or incomplete records may lead to tax audit issues. 9. Reputation and Referrals: Poor property management can harm a landlord's reputation, impacting future rentals and referrals. 10. Scalability: Inefficient tracking systems can limit a landlord's ability to expand their property portfolio. Implementing effective property management tools and systems can help alleviate these challenges and ensure a more streamlined and successful rental experience. visit: www.estatedeskly.com

Effective Negotiation Strategies take place before a lease is executed. Understanding Operating and NNN expenses: Key Negotiation Strategies 1. Conduct Thorough Market Research Before entering negotiations, conduct comprehensive market research to understand current trends, average rental rates, and comparable property values in the area. This knowledge will provide a solid foundation for negotiations as well as set realistic tenant expectations. 2. Clarify Expense Responsibilities Clearly define which expenses fall under the tenant's responsibility and which are landlord responsibility, By ensuring that these responsibilities are explicitly stated in the lease agreement we can prevent disputes and misunderstandings in the future. 3. Negotiate Favorable Rent Increases Rent escalation clauses are common in most commercial leases to account for inflation and market changes. Negotiate terms that include a fair and predictable increase in rent, such as annual percentage increases or tying the increases to a reliable index like the Consumer Price Index (CPI), can be critical down the road to a company’s financial survival. 4. Secure Long-Term Commitments Longer lease terms can provide stability for most companies and reduce risks of  rents spiking 30-50% down the road. We recommend lease terms of 7-10 years with renewal options. This approach not only ensures a consistent expense stream but also makes the lease more attractive if you are 20% under future market rents. 5. Address Maintenance and Repair Obligations While tenants are typically responsible for maintenance and repairs in NNN leases, it's essential to specify the extent of these obligations. Outline who handles major structural repairs, HVAC systems, and roofing to avoid ambiguity and ensure the property remains in good condition. 6. Include Lease Assignment and Subletting Provisions This language will allow you to assign or sublet the lease, which can enhance the lease's flexibility and attractiveness to a subtenant or investor. However, landlords would want to include provisions that require landlord approval and ensure the new tenant meets specific financial and operational criteria. 7. Negotiate a Reasonable Security Deposit Landlords want a substantial security deposit to protect against potential tenant default or property damage. Try to negotiate one month, usually equal to the last month’s rent.. 8. Seek Legal Counsel Leases involve intricate legal and financial details. We recommend clients to engage an experienced commercial real estate attorney to review the lease agreement and ensure all terms are fair, compliant with local laws, and protect your interests. Reach out to The Schmidt Group 619-218-5907  

🏢 FAQ: What should I know before leasing a commercial property? Leasing a commercial property is an exciting step for any business. Here are a few key things to keep in mind: 📜 Lease Types: Understand the type of lease you’re signing—gross lease (landlord covers outgoings) or net lease (tenant pays outgoings, these are costs such as Rates, TasWater and Land Tax). 🏢 Zoning & Usage: Ensure the property’s zoning aligns with your intended use, whether retail, industrial, or office space. 💡 Fit-Out: Some properties come fitted-out, while others may require you to install your own fit-out. Be clear about who is responsible for what when considering a tenancy to lease. Depending on your intended use you may wish to consider matters such as wash-bays, grease traps, extraction, accessible facilities, floor capacity, clearance. 📄 Rental Term: be sure to consider the term you are seeking to secure the property for, it is important to know that you have security of tenure. Usual lease terms are 3 year or 5 year terms, you may wish to request option periods, for example a further 3 year option or a 5 year option to add to your initial term. 📈 Rental Reviews: Check the lease agreement for clauses on rent reviews or annual increases. These are often tied to the CPI (Consumer Price Index) or a fixed percentage. 🤝 Tenant Obligations: Make sure you understand you obligations under the lease regarding maintenance, insurance, any shared costs (if applicable). Need help navigating the commercial rental market? The team at Humphreys Real Estate specialises in finding the perfect space for your business. Get in touch with us today!

When was the last time you reviewed your Opex costs in relation to your lease? Many tenants often focus on rent, but forget about the Opex costs that can seriously impact your bottom line. In my experience working with tenants, I’ve seen Opex costs like insurance, maintenance, management fees, cleaning, and even shared utilities skyrocket unexpectedly. And the worst part? They’re often increasing at a rate that’s out of your control. I recently worked with a business owner who thought they had a great deal on their rent – until they realized their operational costs were going up by 10% a year. That extra $1,000 here, $2,000 there might not seem like much at first, but over time, it adds up to tens of thousands. It’s enough to choke profits and stifle growth. Here’s what you need to know to manage your Opex costs: 1. Read the Fine Print – Opex costs are often hidden in the details of your lease. Make sure you’re fully aware of what you’re responsible for, and negotiate limits on increases where possible. 2. Forecast and Plan – Build these Opex costs into your budget and forecast for increases. Many of these expenses are tied to inflation or other external factors, so don’t let them catch you by surprise. 3. Negotiate Clauses – You can actually negotiate Opex cost clauses before signing a lease. Caps on increases, clear definitions of what’s included, and transparency are key to avoiding surprises. 4. Benchmark Your Costs – Compare your Opex costs with industry standards to see if you’re paying too much. This gives you leverage when negotiating with landlords for better terms. The bottom line? These costs can quickly pile up, turning what seems like a great lease deal into a financial burden. Take control early by knowing what to expect, planning ahead, and negotiating smartly. Have you had an experience with Opex costs affecting your lease? I’d love to hear how you handled it!

Billing Common Area Maintenance (CAM) expenses in NNN (Triple Net) leases is crucial for both landlords and tenants as it directly impacts the financial management and responsibilities of both parties. Here's why billing CAM expenses is important in NNN leases: 1. Cost Distribution CAM expenses are the costs associated with maintaining and operating the common areas of a commercial property (e.g., lobbies, parking lots, landscaping, elevators, etc.). Billing CAM ensures that these shared costs are fairly distributed among the tenants who benefit from them. In NNN leases, tenants are responsible for their proportionate share of CAM costs, which allows landlords to recover the expenses needed to maintain the property. 2. Transparency and Accountability Properly itemized and billed CAM charges create transparency, giving tenants insight into the costs they are contributing to. This helps prevent disputes by ensuring that tenants understand what they are paying for and can verify that the charges align with their lease agreements. It holds both landlords and tenants accountable for maintaining the agreed-upon services and upkeep of the property. 3. Property Maintenance and Appeal CAM billing ensures that landlords can afford to maintain high standards for the property. Well-maintained common areas increase the overall appeal and value of the property, benefiting both landlords (by attracting new tenants) and tenants (by enhancing their customers' experience). Tenants directly benefit from clean, secure, and well-maintained facilities, which can improve their own business operations. 4. Budgeting and Financial Predictability Billing CAM expenses allows landlords to budget for and recover maintenance costs, avoiding financial strain from unexpected repairs or upgrades. This ensures the property remains functional and attractive without the landlord bearing all the costs. For tenants, knowing the CAM charges helps them plan for predictable operating costs, making it easier to manage their own business budgets. 5. Legal Compliance Including and billing for CAM expenses as part of a Triple Net lease ensures that landlords comply with the terms of the lease. This helps avoid legal disputes and keeps the financial relationship between tenant and landlord clear and in good standing. 6. Shared Responsibility CAM billing emphasizes that tenants share responsibility for the common spaces they use. This mutual investment encourages both parties to take care of the property and report issues promptly. In summary, billing CAM expenses in NNN leases allows landlords to recoup necessary operating costs while ensuring that tenants contribute to the upkeep of the common areas they utilize. It helps maintain transparency, fairness, and financial sustainability for both parties.

Investors ! Are you looking for a 8% to 10% return on your investment ? I offer solutions to investors and vendor's by using the assisted sale strategy. I offer a specialist service for vendors who may not have the time, resources, or desire to handle property refurbishments, particularly for inherited properties or those where finances for refurbishment are limited. My service utilises the assisted sale method, taking control of the property to facilitate its refurbishment and sale. Here’s how it works: Assessment and Agreement: I assess the property to determine the necessary refurbishments and estimate the potential increase in value. We then agree on the terms of the assisted sale, outlining the responsibilities and profit-sharing arrangement. Taking Control: Once the agreement is in place, I take control of the property. This includes managing all aspects of the refurbishment process, from hiring contractors to overseeing the work to ensure it meets high standards. Refurbishment: I handle the entire refurbishment process, transforming the property to maximise its market value. My team and I ensure that all improvements are completed efficiently and cost-effectively. Sale and Profit Sharing: After refurbishment, I manage the sale of the property. The increased value from the refurbishments allows for a higher sale price. Profits from the sale are then shared according to the agreed terms. Benefits of this service: No Upfront Costs: Vendors do not need to worry about financing the refurbishment as I cover all associated costs. Increased Property Value: Professional refurbishment can significantly increase the property’s market value, leading to a higher selling price. Hassle-Free Process: I handle every aspect of the refurbishment and sale, allowing vendors to avoid the stress and time commitment involved. Profit Potential: Both parties benefit from the increased sale price, making this a win-win situation. If you're interested in learning more about how this service can benefit you or if you have a property that could benefit from an assisted sale, please get in touch. I look forward to the opportunity to work with you and help maximize the value of your property. DM me, WhatsApp: "AS" to 07773 326751 or email: martin@jpinvest.co.uk