Rent by revenue rate

In a lot of malls all around the world it is very common to set the rent for shops by a rate of their revenue. This system is known as rent by revenue rate. In most places we will tend to see that the rate is fixed and it is what sets the price of a lot. The rate will usually sets between 3% to 15%, depending on the product in question. 

Yet we there are several ways to set the rate differently, depending on your business model:

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• fixed rent plus revenue rate: Some malls prefer to set a fixed income no matter what happens to the shops, therefore they ask for a fixed price for rent and additional low rate of revenue.

• minimum rent or rate of revenue: Malls that wants to know that no matter what they will get the minimum of rent without loosing the value of the place tend to go by that. The idea is if ones revenue is lower the the minimum, then one have to pay the minimum price. if it is bigger then the minimum, then a percentage of ones revenue will be the amount that needed to be paid. This system usually have a downside in the eyes of the tenant since if you charge monthly the amount one pays for rent can be higher then the rate if it is collected yearly.

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As it is mentioned in the sector above, there is an obvious difference by how to calculate the rate by the amount of time. The billing usually goes between monthly to yearly rate - The most common way is usually quarterly bill.

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For us, it doesn't matter how you set the rate, our system will help you do it more efficiently either way.