Lease audits are an intrinsic and essential component of homework when purchasing an investment property. Lease audits apply to apartments, office, retail, commercial, self storage space and any type of property where written leases exist. In lease audits most rent rolls are constant and accurate with the actual leases.
Lease audits can compare rent move to leases to bank or investment company information. Most investment property sellers have not involved in the nefarious activities such as leasing a level of space to unwanted tenants. However, the financial pain caused by either misrepresentations by the seller or owner putting your signature on leases with unacceptable tenants can spoil an usually attractive investment.
- Banking is, by description, risky
- You can take advantage of current tax laws
- Have a minimum 25% general public float and at least 20 traders
- 47$36,000.00 $24,000.00 $12,000.00 $468,991.25 4%
Determine whether appropriate verification was performed for tenants. For example, for apartments this would include both credit inspections and criminal bank checks. Perform appropriate testing for tenants when there is absolutely no information in the document, provided the tenant has signed or will sign a release. Determine whether the tenant occupies the area indicated in the lease roll actually. Interview tenants personally or via written communication to determine if they buy into the lease terms summarized in the rent roll and lease. Interview tenants to determine if they’re satisfied with the services provided by the management company and their relationship with the property owner. Interview tenants regarding their plans or pending changes.
Compare rent and rent move terms versus real payments. Reconcile ledgers with bank or investment company statements. The value of an income property depends upon the quantity and quality of income. Both quality and quantity of the revenue are dependent upon the accuracy of information contained within the rent roll and implicit assumptions about the tenants of lease audits. Sloppy record-keeping and fraud can cause a perspective buyer to be offered a rent roll which is entirely inconsistent with income being produced by the property. For apartments in particular, it is not uncommon for an owner to release leasing criteria to increase occupancy previous to selling the property.
Investors can mitigate their risk and prevent becoming embroiled in a hard, time-consuming and economically draining investment by verifying the accuracy of the lease move and tenant quality via a lease audit. THE MARKETPLACE Research and Consulting department of O’Connor & Associates provides information essential to make decision to commercial real estate professionals.
Occupancy and Rental Data, ownership and management information are regularly collected for four major land uses – multifamily, office, retail and industrial. This information allows investors to compare competitive properties, facilitate business decisions and track market and submarket performance. In addition the data pays to to brokers who for example continually monitor Houston retail space leasing, Houston work place leasing, Houston commercial space leasing, Houston apartments, Dallas apartments, Ft. Worth apartments, Austin apartments, and San Antonio apartments.
But it isn’t fair to state that the price of creating Facebook was a laptop, an web connection and a college student. For each and every Facebook, there are numerous others who try to follow in the footsteps of Michael Dell, Bill Gates, Steve Jobs, and most fail. Therefore the actual cost of fabricating a Facebook is a lot greater than that.
I imagine we can argue that that is the case with the recent AAPL too, that Steve Jobs is a special case. Hardly any people change the world multiple times. 500 million & most others can’t. So it makes me wonder, michael Pearson is right maybe. He has been in the business quite a while and has seen an easy view of the pharmaceutical industry as a consultant so probably really understands the waste that goes on in R&D. And perhaps purchasing products via M&A is better than spending a ton on R&D.