How to Find Tenants for your Commercial Property (Part 1)
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).
Offering Incentives
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
I like the Move in Bonus, and Finders Fee ideas. Many small businesses in my area are well-networked and getting the word out to the right one or two people can bring in some good prospects.
“When looking at how to find tenants for your commercial investment property you need to think in the long term.”
Staying in the business is more important than just having a 1st time blast and gone in the business. Great article. Thanks
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It is better to enter into a conversation with your prospective tenants about what are their demands, problems, and challenges and not just talking at tenants by blasting them with more information about your offerings.
I like the idea of finder fee’s because not only you can benefit for having a new renter but also the tenant. So this is a Win Win idea. And this would also result to a good relationship between the owner of the commercial property and the tenants.
The best way to find a good tenant for your property is advertisement in the posh areas. You can find educated and good tenants from there that`s why I would like to target this kind of audience for your property. Moreover, you can also hire any real estate agent to make a profitable and safe deal for your property.
Short-term leases are always an excellent method of finding tenants. Not only in the commercial setting, but also the residential sector – it’s a big deal to move houses, so when the lease is up you’ll find they’re often very keen to stay a bit longer.
Effective marketing is crucial in getting tenants for your property. Advertise your property in the right media. Use flyers and other print ads.
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Best way to find good tenants is to get the word out in your area. The more flyers and posters you place on public places the more chances you get to find a tenant for your rental unit.
You could get tenants also using the social media, posters, flyers, or could be some tie-up endorsement from other establishments. That’s a good idea that you give a sort of incentives. Of course, the way you converse with them and how you made them feel that you are interested too.