Commercial property is in high demand at the moment, with more start-ups and companies looking to expand in big cities than ever before. There has never been a better time to be a commercial landlord.
With that in mind, here are a few important factors to consider when you are letting a commercial property for the first time.
Research Prospective Tenants
Receiving rent at the end of the month is obviously the only acceptable outcome as a landlord, whether commercial or private. Which means that you want to ensure any potential tenant is able to pay and does not have a history that you would not be happy with. In fact, it is almost more important to research commercial tenants than residential tenants. Simply because there is more potential loss of money and damage to the property when commercial properties are involved.
Where possible, ask for references from previous landlords; alternatively, you can also investigate their trading history or trade credit. If your tenant is a limited company, then you can also check shareholder and directors history. It is always best to be too thorough, rather than not thorough enough, when it comes to potential tenants.
Subletting
When you do have a tenant, there is always the potential problem of them subletting the property without permission. To prevent this from happening from the outset, there should be a subletting clause in the contract which clearly states a complete restriction on this throughout a tenant’s occupancy.
Financials
If you are a limited company, then it is vital that you protect yourself as much as possible in order to avoid any future financial issues. Financial accounts and records should be viewed in order to check that a company is financially sound before making an agreement. Personal guarantees from directors can also be obtained if the situation remains uncertain or likely to change.
Rent deposits could also be requested at the beginning of the tenancy in order to cover any potential losses. This is typically associated with residential letting but can be even more essential for commercial properties as well.
Seek Professional Advice
At the end of the day, there are many more things that you need to consider when it comes to letting as a commercial landlord. Many problems that do occur could be avoided if a professional was consulted during the drawing up of contacts, etc. This is especially true when fraught tenant-landlord relationships occur, as an impartial party is almost necessary to avoid a complete breakdown of relationships or even legal action.
Here at Roger Hannah & Co we are always aware of the growing trends and endeavour to stay ahead of them for maximum benefit. Our specialist team is always prepared to help with your property needs. Simply call 0161 817 3399 or fill out the contact form for a confidential discussion regarding your property.