This chapter and Chapter 6 are concerned with the factors affecting the income and Chapter 7 deals with the factors determining yield.
2. Rental value and net income Property can be let on the basis that the tenant will bear all of the costs and outgoings associated with the property including repairs, insurance, rates, etc. These lettings are normally known as full repairing and insuring lettings or lettings on FR and I terms or FRI leases. An alternative form of this kind of letting is what is known as a “clear lease”, ie one where the tenant undertakes to keep in full repair the interior of the demise and also to pay a service charge to reimburse the landlord for a proportionate share of the cost of insuring, repairing, maintaining, servicing and decorating, etc the exterior and common parts.