what percent a lease go up per year im being told market value this doesnt sound right

In Leasing Property - Asked by jeff t. - Nov 17, 2010
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Answer(s)

Nadina C.
Broker/Agent
Phoenix, AZ

Jeff -- "Market Value" does not make sense and is not predictible. It should be a flat percentage of your base rent, probably no more than 3% or something related to a consumer price index or rate of inflation for the previous year with a cap on the percentage. Be aware that the percentage increase each subsequent year is on the already increased base. If you will be reimbursing the landlord's expenses, be sure the lease gives you the right to examine the books or invoices. And be sure the landlord must show you his certificates of insurance yearly as well as your showing him yours. Also, the lease must be quite specific about which major repair items are the landlord's responsibility and which are the tenant's.

Nov 18, 2010
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Joseph J.
Broker/Agent
Fort Lauderdale, FL

3%-5% increases are standard now for average market rates. In some cases the initial rental rate is so far below market you may see increases in the 10%-12% range until the rent reaches a desired level; then the increases level out to arond 3%-5%.

Nov 18, 2010
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Kathy S.
Broker/Agent
Petaluma, CA

Market Value pricing generally refers to renewal options. If you sign a multi-year lease, typically you'll pay 2.5% to 4% increases (or be tied to a Consumer Price Index) on your anniversary date each year. If you start at a very reduced rate, your increases might be higher. Recently, my landlord clients have been naming a dollar amount instead of a percentage. Call your local commercial realtor and ask for representation -- it will pay off in the long run.

Nov 18, 2010
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