Do you want to know what I think is the single biggest fear that stops people looking at commercial property?
If I hear one single reason why people don't want to look at commercial, and it not only stops them looking, it stops most people from even learning how to overcome that obstacle…
It's like a completely paralysing, irrational fear.
What If I can't find a tenant – What if it is untenanted.
Obviously, it's not ideal to have an untenanted property, but there are many ways to avoid that ever happening and just as many to fix it if it does.
Here's what I mean…
Offering Move-in Specials
2 or 3 months free rent – as an “establishment bonus” to help them get up and running – you can do this to get then in then door for a 3 or 5-year lease. It's a small loss, but it gets your place filled which is better in the long run for your income.
Or, another twist on this – depending on how desperate you are…A business that is just starting out feels especially vulnerable and nervous when making a long term commitment to a commercial lease. This is because they are not yet generating much income (if any), nor have they really proven the effectiveness of their business plan.
So what you can do is offer a discounted short-term lease with an option to extend at the end of the first term. This gives both the tenant and the landlord flexibility.If they are underperforming or rents in the area go up, this strategy can give you options.
You might be pulling in less rent initially, but eventually, you can charge the going rate. Also, you are helping the business make money, which might make it grow larger increasing their need for space.
I'm really big on helping my tenants business to do well – generally, I do what I can to make sure they are successful. It's a huge win-win because then they become established and stay for years.
If you own more than one commercial property or have a large space that can fit multiple businesses, having your current tenants help you find additional tenants is a great way to find new renters.
You can offer finder fee’s for helping bring in new clientele. This helps in two separate ways in that your current renters will be happy with the neighbours and you are making sure to fill space. These incentives can be one of the best ways to consider when looking for how to find tenants for your commercial investment property.
Take out Advertisements
You can place ads in local publications and on boards around town when you are considering how to find tenants.
I've found more than one tenant setting up a “fan page” on Facebook for the property and then advertising on Facebook to people in the local area – it absolutely worked a treat, and I got good tenants in a very short space of time,
Your advertisements should focus on the positive points of the building, the area as well as any amenities you have. If you have a small shop, you could emphasise it advantages such as:
Storage space for stockBathroom facilities for StaffKitchen facilities for Lunches and CoffeeCustomer space for browsing your goodsSecurity featuresCustomer parkingLocality Advantages (such as passing traffic)Signage Options
If you own an eatery or restaurant space, you could emphasise advantages such as:
Kitchen facilitiesCustomer and staff bathroom facilitiesAir ConditioningSeating Options (such as outdoor al fresco)Customer Views (such as a deck overlooking a park or water view)
If you own office space, some advantages might be:
Network Access Points (for internal computer network)Bright, Open spaces (for employee satisfaction)Access to local eateries and bars for employee lunch optionsCar Parking (especially important when street parking is unavailable or expensive)Public Transport Access
My tenants are responsible for renovations, fit outs and upgrades to the space which means, apart from providing necessities (such as bathrooms), you don't have to worry about decorating the space too much.
It is likely a business will want to brand the space themselves and have an idea of how they want their business laid out.
This is an advantage for you as it means you do not have to spend much on these costs and you can focus more on the other advantages of the space such as location and facilities.
Finally, depending on your space, you could look at the kind of companies that hire spaces like that… In Byron Bay, all the big name chain stores are coming in. Going to companies like Witchery or Jetty Surf, or one of the other big clothing chains and seeing if they are interested in your space could be an easy way to find a long term tenant with plenty of money behind them to maintain a long-term lease.
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