A question about a lessor of real property and impacts on net operating income.?
What are some methods that a lessor of real property will use to prevent a degradation of their returns due to inflationary impacts on net operating income?
Public Comments
- 1. Entering into leases where the rent increases over the lease term, based on fixed increases, tied to an inflationary index (CPI), or some other formula. 2. Passing through increased costs of operating the property to the tenants for reimbursement. 3. Financing the property with fixed-rate debt where the interest does not increase with other general price increases. 4. Entering into long-term contracts for expenses and services utilized to operate the property to avoid future price increases.
Powered by Yahoo! Answers