WHAT IS THE FLOW OF MONEY?

What is the flow of money?

What is the flow of money?

Blog Article

Do you know the flow of money?


A landlord will engage a rental agent to secure a rent deal; in return, the particular agent will be paid a commission-based fee. This is called the flow of money (or even flow of commission). The actual tenant, meanwhile, is going to be required to deal with the actual leasing agent so that you can obtain the lease.


Will the flow of money favour the landlord or the leasee?


The question of whether a leasing agent is ultimately performing in the best interest from the leasee or landlord is really a complex and sensitive one. Understandably, the nature of the lease or even engagement with the property manager will affect the character of the proceedings.


For instance, if a commercial tenant is seeking long-term surety for his or her business, they may engage in a lease phrase of 3, 5 or 10 years. For the leasing realtor, this means any potential income arising from the actual transaction will only take place at these relatively long intervals. This can impact any profit the agent stands to get from the transaction, especially if this is the only house they are representing for this landlord.



On the other hand, if your leasing agent is which represents a landlord throughout multiple properties, you have the potential to gain multiple fees within the identical period. This elevated incentive could potentially influence the actions of the realtor, who may act strategically in order to free up their earnings.


Some agents will provide neutral information in order to facilitate a fair deal for all celebrations, the fact remains that the info an agent discloses with a potential leasee is up to their discretion. This officially means that the actuel or landlord could end up being disadvantaged if the pull associated with commission swings the particular favour in the other direction.


Brokers vs CRES - who do they favour as well as who pays?


It’s additionally worth considering the role regarding broker commissions and company real estate services (CRES), which may work in the favor of either the owner or the property occupier.


Brokers act upon behalf of the property manager. They are paid the commission when they are proved to be the “effective cause” of the rent transaction, e.g. by providing an approved offer you and a signed hire. The broker’s commission is actually added to the cost of the tenant’s lease rental and also amortised over the cost of the actual lease - therefore essentially, the renter pays the commission.


CRES providers represent the particular interests of the occupier from the properties (the renter or the owner-occupier). Their understanding commercial property may benefit customers by helping them save money upon rental and house expenses, and reducing risk through assisting with strategic property decisions. CRES providers are usually paid by the get together whose interests they represent and are not usually paid from the property funds.


How can unbiased Property Reviewed help level out the playing field?


As discussed above, the current flow of money system creates a ‘loophole’ which means, sometimes, a potential tenant might not receive the complete picture in regards to a commercial property, together with certain pieces of information leftover undisclosed. This leaves the leasee at a distinct downside when making a decision on the commercial property.



By giving an online platform in which lets former and current tenants abandon unbiased reviews in regards to a property, we make an effort to close this space and bring much-needed transparency for the commercial property industry.


Future tenants reap the benefits of clear and open information about the property, whilst property owners and administrators gain access to valuable house analytics and insightful feedback about their space.

Report this page