OPEX stands for Operating Expenses (also called Operational Expenditure). In commercial real estate, OPEX refers to the ongoing costs required to operate and maintain a property on a day-to-day basis. These expenses typically include: Building maintenance and repairs Property management fees Insurance premiums Utilities (electricity, water, gas) Cleaning and landscaping Security services Council rates and taxes Understanding OPEX is crucial for commercial property investors as it directly impacts your net rental income and overall return on investment.

A gross rental is the total rental income received from a property before any expenses are deducted. This is the full amount your tenant pays you each month or year, without accounting for: Operating expenses (OPEX) Property management fees Maintenance costs Insurance Rates and taxes For example, if your tenant pays $50,000 per year in rent, that's your gross rental income. Your net rental income would be the gross rental minus all your property expenses.

GST on commercial property transactions depends on several factors: You may need to pay GST if: You are GST registered, The property is used for taxable activities, You're selling as part of a business operation. Key considerations: If the purchaser is not GST registered, you may still need to charge GST if you're registered and the sale is part of your taxable activity. The purchaser's GST status doesn't automatically exempt you from GST obligations. GST may apply to the full sale price, not just your profit. Important: GST rules for commercial property are complex and can vary based on your specific circumstances. We strongly recommend consulting with a qualified tax advisor or accountant before completing any commercial property transaction to ensure compliance with current GST legislation.

Tenant responsibility for maintenance and remodeling depends entirely on your lease agreement terms. Commercial leases typically fall into several categories: Gross Lease (Full Service): Landlord pays all operating expenses Tenant pays only base rent Landlord responsible for maintenance and repairs Net Lease: Tenant pays base rent plus some operating expenses Single Net: Tenant pays rent + property taxes Double Net: Tenant pays rent + taxes + insurance Triple Net (NNN): Tenant pays rent + taxes + insurance + maintenance Common lease provisions: Routine maintenance often tenant's responsibility Structural repairs typically landlord's responsibility Improvements and alterations usually require landlord approval Major remodeling costs often negotiated case-by-case Tip: Clearly define maintenance responsibilities in your lease agreement to avoid disputes later.

Rent review increases should be based on several factors: Market-Based Approach: Research comparable properties in your area Consider current market rental rates Factor in property improvements and amenities Common Increase Methods: Fixed Percentage: Often 3-5% annually CPI (Consumer Price Index): Tied to inflation rates Market Review: Assessment of current market rates Combination: Mix of fixed increase and market review Factors to Consider: Local market conditions Property condition and improvements Tenant's business performance and lease compliance Length of tenancy and tenant relationship Economic conditions and inflation Industry Standards: Annual increases typically range from 2-5% Market reviews often occur every 3-5 years Consider tenant retention costs vs. potential income increase Recommendation: Balance fair market returns with tenant retention. A good tenant paying slightly below market rate may be more valuable than vacancy costs and finding new tenants.