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Leases

Leases. 3.4. General Lease . A lease is a contract that allows for one party to use the property of another party, for an extended period of time. The lessee is the party or individual wanting to utilize the property. The lessor is owner of the property. Rental agreement C ontracts.

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Leases

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  1. Leases 3.4

  2. General Lease • A lease is a contract that allows for one party to use the property of another party, for an extended period of time. • The lessee is the party or individual wanting to utilize the property. • The lessor is owner of the property. • Rental agreement • Contracts

  3. Rental Agreements • Common rental agreements : landlord and tenant. • In a fixed-term tenancy, either the landlord or the tenant may terminate a rental agreement when the specified term is nearing completion. • An at-will tenancy is a tenancy in which either the landlord or the tenant may terminate at any time by giving reasonable notice. • The security deposit is initial payment paid by the tenant and held by the landlord until the property is returned or vacated.

  4. Jabba The Hutt is asking for a 2000 republic credit for a security deposit and 950 republic credit per month rent. What will be the total cost for a 18 month lease? • 2000+18*950=19,100 RC

  5. Rentable office spaces • Class A office spaces are found in the best quality buildings and the most desirable locations. • Class B office spaces are found in buildings are well-maintained , but also a little older. Just older building of Class A. • Class C: older buildings in need of extensive repairs and are found in less desirable areas.

  6. A company owns a Class B building and charges $3500/month to rent it. If the company spends $90,000 to upgrade the facility , by how much would they have to increase the monthly rent to recover the cost of the upgrade within 5 years? • 5 years = 60 months. • 90000/60= $1500/month • The rent in the upgraded facility would need to be $5000/month.

  7. Luke has moved to New York and wish to rent his home in Tatooine, so he hires a management company that charges 7%of the rental price for their fee. If the home rents for $1500/month, how much will Luke earn from the monthly rent. • The company charges 7% of $1500, which is $105. The rest, $1395, is sent to Luke.

  8. Leasing a Car • The up-front payment. • The monthly payment • The length of the lease • Possible additional charges at the end of the lease.

  9. James wants to lease a new Aston Martin car, and he is presented with the following three options. Compute the total cost of each option. • Option 1: $0 up-front, with a payment of $ 209/month for 36 months. • Option 2: $999 up-front, with a payment of $189/month for 36 Months. • Option 3: $2999 up-front, with payment of $149/ month for 36 Months.

  10. Option 1: 0+209*36=$7524 • Option 2: 999+189*36=$7803 • Option 3: 2999+149*36=$8363

  11. For the new Prius, Arthur is considering leasing can be purchased for a down payment of $4000 and 36 monthly payments of $550. After 3 years, he will own the car and , based on projections, he will be able to sell it for $16,000. If he follows this plan, what will be total net cost for the car? • The total net cost will be the amount paid less than the amount recovered. • The amount paid will be 4000+550*36=$23,800 • Thus, 23800-16000=$7800

  12. HW 3.4 P. 195 • 1-17

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