Rent Free Period
The situation
The owner of a bulk goods warehouse has signed a new tenant to a five-year, $12,000 per month lease with CPI rent reviews every 24 months.
To sign the new tenant, the landlord has had to offer a rent-free period of six-months. The problem is, the landlord has outgoings and mortgage commitments and needs the rent to flow from day 1.
PropPay solution
Through the leasing agent, PropPay agrees to sign a concurrent lease with the owner on the following key terms:
Term: 18 months
Monthly rental payments: $8,000 per month
Onboarding Fee: $349
Monthly Admin Fee: $432
PropPay collects the monthly rent from the tenant between months five and 18, a total of $144,000.
PropPay pays the landlord a monthly rent of $8,000 every month for 18 months starting in the first month, a total amount of $144,000.
PropPay’s total Admin fees total $7,776 or just 5.4% of the total rent.
The landlord has a new lease, their rent is being paid from day one, and the tenant has their rent-free period.
*Subject to approval. Terms and conditions apply. Differences due to rounding. Example assumes a rent increase of 2% every two years.
