RICH Property Solutions, Ahmedabad
Pre-leased property meaning
A pre-leased property is a commercial property, such as an office, shop or showroom, that is already rented to a tenant under a lease when you buy it. The new owner takes over the lease and receives the rent from the day the sale is complete.
How it works
- The seller owns a commercial property and has rented it to a business under a written lease.
- You buy the property. The lease continues with you as the new owner.
- The tenant pays rent to you, as the lease says, until the lease ends or is renewed.
- Maintenance, property tax and repairs are split between owner and tenant as the lease says.
Pre-leased and vacant property compared
| Pre-leased property | Vacant property | |
|---|---|---|
| Rent | Starts from the day you buy, under the existing lease | Starts only after you find a tenant |
| Tenant | Already in place, so you can check who they are | Unknown until you sign one |
| Price | Usually linked to the rent and the lease | Linked to the space and the location |
| Main risk | The tenant leaves or stops paying at the end of the lease | The space stays empty |
Good and bad sides
What works in your favour
- Rent from the first month
- A tenant you can check before you pay
- No search for a tenant on day one
What to watch
- The lease ends and the tenant does not renew
- A yield that looks high because the price is low for a reason
- A tenant that is weak or pays late
- A short lock-in period
What to check before you buy
- Who the tenant is and how long they have been there
- The lease: remaining term, lock-in, rent increase, deposit, notice period
- Ownership documents and approvals for the property
- Who pays maintenance, property tax and repairs
Our pre-leased property page for Ahmedabad has the longer checklist, and this guide shows how to work out the return.
This page is general information. It is not legal, tax or investment advice. Check the documents of any property with your own lawyer and chartered accountant.
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