by Buying a pre leased property can be a smart move, but only if you check the basics properly. Here’s a clear checklist you should go through before putting your money in.
1. Tenant profile
Check who the tenant is. A branded company, bank, or well known chain is always safer than an unknown local business. Also check their business stability and years of operation.
2. Lease agreement details
Read the lease agreement carefully. Look at lease tenure, lock in period, rent escalation clause, and exit conditions. A long lease with a lock in period reduces vacancy risk.
3. Rental yield and ROI
Calculate actual returns, not just what’s promised.
ROI = (Annual Rent ÷ Property Price) × 100
Compare this with other investment options to see if it makes sense.
4. Rent payment history
Ask for rent receipts or bank statements. Regular, on time payments show the tenant is reliable.
5. Location and demand
Even with a good tenant, location matters. Check footfall, road width, visibility, parking, and future development plans around the property.
6. Property ownership and title
Verify clear title, approved plans, and ownership documents. Make sure there are no loans, disputes, or legal notices on the property.
7. Maintenance responsibility
Check who pays for maintenance, property tax, and repairs. In many pre leased deals, tenants handle most costs. Confirm this in writing.
8. Lease renewal terms
Understand what happens after the lease ends. Is renewal automatic? At what rent increase? This impacts long term income.
9. Exit potential
Think ahead. Check how easy it will be to resell the property. Pre leased properties with strong tenants and good leases are easier to exit.
10. Stamp duty and registration
Ensure the lease agreement is properly registered. Unregistered leases can create legal problems later.
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