Paying Property Brokerage Fees In Buenos Aires

[datson2000]

Ok, so I have a brokers contract in front of me for a commercial lease and there is a clause about fees. They state that at the time of signing, 5% of the lease value (5 year contract) will be due.

My question is, for commercial leases, is this standard practice? Cash flow will be critical for me in the 1st year particularly so I don't want to have to pay 5yrs brokerage upfront.

Thanks all for your help.

 

[steveinbsas]

Ok, so I have a brokers contract in front of me for a commercial lease and there is a clause about fees. They state that at the time of signing, 5% of the lease value (5 year contract) will be due.

My question is, for commercial leases, is this standard practice? Cash flow will be critical for me in the 1st year particularly so I don't want to have to pay 5yrs brokerage upfront.

Thanks all for your help.

If the rent (for example) is $30.000 pesos per month you would pay $360.000 in rent per year and $1.700.000 during the five years.

Five percent of $1.7 million is $85.000 and (given a monthly rent of $30K) that is less than three months rent for a five year lease.

If I understand correctly, the typical "broker's fee" for most two year residential leases is two months rent.

If you "don't want to have to pay 5yrs brokerage (fee) upfront" the only alternative I know of is to rent directly from a property owner.

 

[steveinbsas]

If you "don't want to have to pay 5yrs brokerage (fee) upfront" the only alternative I know of is to rent directly from a property owner.

You could try to tell the landord that he must pay the borkerage fee if he wants to rent the property to you...or you coud offer the split the fee.

And don't forget about the "unknown fees" you will have to pay not only before you open the doors for business, but to keep them open as well.

 

[datson2000]

Thanks Steve, spoke with the broker, they are willing to negotiate so I guess market conditions are favourable right now. Always pays to ask...