As the owner of commercial property, your main goal is to produce income as quickly as possible. Commercial property investing is only fruitful when all of your commercial real estate listings have been leased by paying tenants.
Unfortunately, many landlords make mistakes that can negatively affect their efforts. Avoid these common mistakes so you can get your properties producing rent as quickly as possible.
- Lease Signing without A Plan - To obtain the best tenants and the best rent, you must have a strategic whole-building plan for your commercial property.
- Leasing Preferred Spaces First - Once the best space is gone, the rest of your space could be devalued. Take the opposite approach to ensure you get the most for all of your commercial real estate listings.
- Poor Capital Allocation for Improvements - Research well to avoid spending funds on improvements that will not actually help you lease your property faster or bring in higher rents. Consider improvements that make a space more valuable to a tenant before those that do not affect individual tenants so much.
- Not Comparing Yourself to the Competition - Success in commercial property investing and leasing requires knowing your building’s strong and weak points in comparison to other competing properties. In doing so, you can determine unique selling points, decide on improvements that should be made, and develop a “story” for your building so it can be effectively marketed to the type of tenants you wish to bring in.
- Missing The Little Details - Something as simple as drab looking common areas, missing blinds or non-working light fixtures, messy parking lots, and not having inviting landscaping can be enough to deter some tenants. For the small time and investment required, make sure the little details are handled so your commercial property is properly presented.
- Incorrect Pricing - Although you want to get the highest rent for your space, there are times when bringing in a good tenant now rather than later will benefit you more. Consider wisely before holding out for a few extra dollars, as this could leave you with vacant space. There are other ways to recuperate that money.
- Not Thoroughly Researching A Tenant - Before leasing any commercial real estate listings, take the time to fully research prospective tenants. Investigate their finances and revenue; look for a solid business plan.
- Not Reviewing Termination Clauses - Before signing anything, you and your broker should double check all termination clauses to ensure tenants don't have an easy out and can't leave you with the costs of improvements, lease incentives, and other unamortized fees.
- Not Considering Your Own Lease Objectives - Although the goal of commercial property investing is to get property leased, avoid doing so if the arrangement does not work in favor of your own business objectives.
- Leasing to Incompatible Tenants - A commonly overlooked detail that can give you headaches or vacancies is not making sure that new, incoming tenants are compatible with existing ones. Businesses with vastly different work styles and needs may not be able to cohabitate in the same building very well.
Success in leasing commercial property involves more than just agreeing on a leasing amount and signing a standard contract. Every situation and every lease of commercial real estate listings to different tenants is a unique event.
Be sure to work with a professional leasing agent who can help you find the best tenants and reach your commercial property investing goals by avoiding these costly landlord leasing mistakes!