How do I calculate a monthly rental rate for a small house that is zoned commercial for office space?

This house is 925 sq. ft. and has parking for approx. 6 vehicles. It has 3 bedrooms, full kitchen and 1 full bath on main level & 1/2 bath in basement. Basement is divided, main area is finished, separated from unfinished side which hold the utilities.
In Leasing Property - Asked by Lisa C. - Mar 27, 2017
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Answer(s)

Dennis G.
Broker/Agent
Pasco, WA

The rental rate is set by the use. So unless you are renting it as a commercial office space that fact that it is zoned as such doesn't matter. The rental rate for the property is set by the competitive rate in your area. i would suggest conducting or finding a rental survey for that is being charged in your area. Realtors and or Property Managers can help.

Mar 27, 2017
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Michel R.
Owner/Investor
Santa Monica, CA

ask for prevailing rate adjust otherwise pending demands, location and condition

Mar 28, 2017
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Norah H.
Owner/Investor
Drumheller, AB

Whether rent is residential or commercial you need to look at what kind of a return you need to make on the investment. The income less utilities, taxes, insurance and an estimate of the maintenance (which depends on the condition of the property), in addition to allowing a certain percentage of return annually beyond your costs. We like to see at least a 12% spread between our income and our costs after financing the property. Be sure to allow enough cashflow to cover the difference between your income and how much principal you are required to pay back each period. When determining if an investment is viable, we endeavour to have the monthly rent cover the triple net costs and the interest and hope that we have evaluated the property well enough to have a net cashflow after maintenance. This generally means you are paying yourself to do the maintenance. If you are looking at trades for most things, you are likely going to be in the whole. As always location, location, location. If you have invested well, over the course of time your rents should increase to provide a reasonable income in addition to carrying your costs.

Mar 29, 2017
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