If you have not already heard,
Integra Realty Resources did announce the release of Viewpoint 2011, the
preeminent real estate annual economic forecast produced by Integra Realty
Resources, Inc.
This marks the 21st year of publication that has been
providing information pertaining to economic growth, capitalization rates,
discount rates, and market-by-market value trends for major investment grade
real estate.
This publication provides invaluable information
regarding the state of many major markets and the performance of the
difference commercial asset classes.
Get your copy by clicking here!
Please also note our new address:
1001
East Blvd. Suite B
Charlotte NC 28203
Best regards,
Rob Cassam
Carolina
Realty Advisors
704-442-1774 Ext. 100
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Landlords Face Two New Tax Reporting Laws |
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Beginning in 2011, landlords will be required to issue 1099 statements to any
service provider who receives $600 or more for work relating to the
rental property.
The 1099 statements will need to be submitted to the
service provider, and will also be sent to the IRS.
This means that landlords will need to develop a system for
collecting tax identification information, legal names and addresses for
contractor they do business with.
The new provision is part of
the Small Business Jobs Act that was passed two months ago, and signals
a change over existing rules that used to apply only to landlords who
rented as a business or trade. Now, anyone who receives rental income is
required to disburse 1099 statements. The rules will also include vacation home
rentals.
It is estimated that any one landlord will need to
prepare a number of these 1099 statements, a dozen or so on average, at the end
of each tax season or pay to have a tax preparer do the work. Industry
experts fear the requirement will place a financial burden on small
landlords, which is an irony given the intention of the jobs law was to
help small businesses.
A second tax reporting provision is set to
begin in 2012. In this case, landlords will be required to prepare 1099
statements on both services and goods purchased. This requirement, tucked
into the health reform law, is the more controversial and attempts have
already been made to repeal it. Prior IRS regulations appears to exempt
credit card purchases, which are already tracked by banks and card
servicers.
The IRS is currently developing regulations to aid
taxpayers in compliance with both provisions, but the agency is still in
the preliminary stages of rule-making, where it is evaluating public
comments to the proposed changes.
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Important Leasing Considerations You Do Not Want To Avoid |
According to
Small Business Notes, it is important that you know exactly what you want or
don't want, in a lease before you begin looking for office space or initiate the
negotiating process. What is the maximum lease that fits your needs? Your ideal
timeframe? Do you know the basics of leasing and how to analyze the cost of the
lease? It is equally important that you go into the process prepared and with
reasonable expectations.
The process of locating usable space with a
knowledgeable real estate agent is the real start. Have you determined the
location that is best for you? Your search will help prepare you and temper
expectations greatly. Even if you are contemplating renegotiating a lease at an
existing location, or moving to a different space with the same landlord, it is
a good idea to comparison shop just to familiarize yourself with what the market
trends and prices are.
Know what you want and what you must have.
You must know the maximum and minimum amount of square footage that fits your
needs, as well as the floor requirements. Does the nature of your business make
the groundfloor a necessity? Is a panoramic view from the conference room
important to you? Do you want a build-out of the office from the concrete,
meaning totally new floor, carpet, walls, etc.? Is there a security system in
existence at the office space? Do you require one? Is the heating and air
conditioning individually maintained? If not, how will you be charged for it?
The more that you require, the less negotiating room you will have. On
the other hand, make sure you, or the realtor, find out important information
like the occupancy ratio over the last year. Is there square footage available
where a lease has fallen through? There are instances in which large
corporations rent entire floors, then do not need as much or decide to rent
elsewhere. In these cases, the management company of the building will sublet
the space - often for less than the going rate for office space in that
building. All of these things could be negotiating points in getting the best
rent.
Determining the length of the lease. One year leases are few
and far between, with the most typical being three (3) years. It is important
that you take your growth potential into consideration. It will not be smart to
sign a 1,200 square foot, five (5) year lease when you anticipate tremendous
growth and will need 2,500 square feet in three years. It might not be a bad
idea to put a clause in your lease that addresses this if much growth is
anticipated. This can be done in a variety of ways, which your realtor can
address for you.
Have a monetary range in mind. During the
negotiations, you will need to have the amount of rent that you can afford every
month. Your search and your realtor should be able to provide you with the
current market rental costs for the area in which you want to relocate, or even
for renegotiating at your present location. The national average for rent has
been noted to be between four (4) and five (5) percent of your total operating
costs.
Determine all costs of the lease. It is essential that you
determine the other costs associated with the lease of the space. For instance,
what portion of the heating and air conditioning are you responsible for; and
what is the average monthly cost. Get types and figures on associated costs,
from the landlord and the Realtor - it will not hurt to have them from two
sources. As you plan your finances, you do not want any unexpected expense
surprises.
One cost that is often overlooked is the common area factor.
The common area is all parts in the building that are used by or for all tenants
of the building. Usually included are: building lobby, all corridors, janitorial
and electrical closets, elevator rooms and rest rooms. The owner determines what
percentage of the building these areas represent and adds that percentage to the
amount of space, you, the tenant occupies. So, while your rent per leaseable
square foot may be $18.00, if there is a 15% common area factor, you actual cost
per square foot is going to be $20.70.
Although the previous tasks may
seem arduous, the real task is getting final lease approval - that is all
parties agreeing on the finer points. You should write down all the things you
would like to see in the lease and any specific time frames. You do yourself an
immense favor by having a clear cut idea of what you want, which things are
negotiable and which things are not.
Be ready to compromise, as it is
highly unlikely that the lessor will tailor the lease to your exact
specification. It is important that you have a clear idea of those items which
you can easily give up, as flexibility is essential to successful lease
negotiations. Equally important is not being desperate, or you can end up with a
lease on a property which does not fit your needs at all and it will give the
lessor all the bargaining power. It is an excellent idea to have your strongest
negotiator handle this area, or brush up on your negotiation skills before going
in.
At the very least, being knowledgeable about the current market
trends for your area, the particulars of the real estate you are looking at and
what you want is crucial to obtain a successful lease.
There are many
options and terms available when leasing office space. You should always be
ready to walk away if the terms are not acceptable to you. In order to make sure
you have this option, you must start your search early enough and be thorough.
You should have a couple of properties which might work for you, ranked in order
of most desirable. successful negotiations are easiest when you have prepared
yourself and really know what your needs are. |
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How to Play The Market and Never Loose!
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Contact Information |
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What I do... |
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I
provide
real estate brokerage services for small and medium sized businesses, investors,
and individuals who are fed up with loosing money, paying too much, spending too
much time not getting the right piece of property for their particular
situation.
I act as the quarterback in the real estate transaction for my clients who coach
me in managing all of their different needs.
My clients love not needing to worry about making bad decisions or bad
investments and love winning negotiations.
Ask yourself these questions:
What types of growing pains is your company facing with your location?
Are rising occupancy costs a challenge your company is facing?
Is having too much space or not enough space a challenge your company is
facing?
How much of a problem is dead equity in your property for you?
How long are you prepared to go on doing nothing about situations in
your business that are not quite right?
Give me a call, I may be able to help with your lease or purchase!
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How To
Lease Commercial Property |
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