Do you own office space?
Maybe a retail shop or a warehouse?
When looking at how to find tenants for your commercial investment property you need to think in the long term. Making in-roads with companies that look to have the potential for expansion as well as a long-term goals for the area help ensure the safety of your investment and the security of your overall income.
Real estate investing can be a challenging activity and commercial properties generally come with a higher risk. They are more susceptible to economic downturns and longer periods of vacancy.
On the other hand, they can offer larger rental returns and long-term leases once you do find a quality tenant. However, if your commercial investment property sits empty you are likely losing money rather than making it. There are many things you can do to attract tenants.
Offering Move-in Specials
Companies that are just starting out might need limited space in the beginning but could become a much bigger client down the road. When considering how to find tenants for your commercial investment property, offer specials for some of your smaller spaces.
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. In this case, you can 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 flexability.
You might be pulling in less rent initially, but eventually you can charge the going rate. In addition, you are helping the business make money, which might make it grow larger increasing their need for space. At that time your property management might find the owners asking for more space and then you can make even more money from the one tenant.
Keep in mind that businesses do not move around as much as tentants in residential premises. This is especially the case for businesses that service local needs and rely heavily on passing traffic and local word-of-mouth (think Restaurants, Coffee Shops and Retailers).
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 neighbors and you are making sure to fill empty space. These incentives can be one of the best ways to consider when looking for how to find tenants for your commercial investment property.
Continued in How to Find Commercial Tenants – Part 2