Over Rented Property

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    Over Rented Property

    what circumstances under which commercial property may become ‘over-rented’.

    #2
    Property is deemed to be over rented if the passing rent is higher than the current market rent. A situation like this tends to cause concern to lenders who often assess borrowing against market rental income and not that actually being achieved. Their fear is that if the tenant defaults there will then be a challenge achieving the 'higher' rent again with a new tenant.

    The downside is that when a property is under rented the lenders use the lower rental figure for any assessments.
    CFA

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