In India, people often lease out their property to companies, banks, and other organizations for commercial purposes. This is known as Largely Lease Property. It’s a common practice aimed at earning the highest rental yield for their property.
What is Lease Property Meaning
Lease property means giving someone else the right to use it for a set amount of time with agreed-upon terms and conditions. It’s like renting a property, but leases usually last for a longer period compared to rentals.
When an individual rents a property, it’s usually called a rental agreement, but when a company or organization rents it, it’s referred to as a lease. Lease agreements are registered and require stamp papers similar to those used for purchasing or selling property.
Benefits of leasing a Property
Both parties benefit from leasing a property. The landlord (Lessor) receives a guaranteed monthly income, especially when larger organizations lease the property for their businesses in multiple cities. The tenant (Lessee) gets access to the property for a monthly payment, usually around 0.7% to 1% of the property’s value.
If the organization were to buy the property instead, they would tie up a significant portion of their capital expenditure (capex) in just one property. However, with the lease model, they can open multiple branches, stores, outlets, and offices in over 100 locations, maximizing their business opportunities and operate as asset light model.
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