Shopping center investing

[Ali Nurmohamed]

So my question is, after that I’ve added value to the property am I allowed to raise rents from the tenants?

Because I don’t exactly know how to qualify for a cash-out refi on a retail property.

[Nicole Heasley Beitenman]

Quote from @Ali Nurmohamed:

Quote from @Nicole Heasley Beitenman:

Quote from @Ali Nurmohamed:

So my question is, after that I’ve added value to the property am I allowed to raise rents from the tenants?

Because I don’t exactly know how to qualify for a cash-out refi on a retail property.

That depends on your market. Are your tenants paying market rent for the type of unit they're in? And does your lease already have rent steps built in? Do your renovations conform to other properties of a similar class in that neighborhood? You can take a building in a D neighborhood and give it all the gold trimmings, but that won't give you Class A rents. 

Commercial properties are valued by income. You should consult 3-5 commercial lenders regarding next steps.

Yes thank you for your response, but I think you misunderstood the question.
maybe that’s my fault. I meant if you’re allowed to raise rents on a shopping center after you’ve rehabbed it.
because I don’t really know how to qualify for a cash-out refi. Or do you have to renew the leases to the tenants?

It'll depend on your state's laws. Generally, a lease is a binding contract. You can't break a lease early unless the tenant is in violation of the lease, in which case the contract should state how and when the lease can terminate because of violation. Now, once the lease is up, you can do whatever you want. You no longer have a contract with that tenant. But if they still have 5+ more years on their lease and rent steps aren't built in, you typically can't just rip it up and force a new monthly rent on them.