There’s only one reason to own commercial property—to make money! Get your space leased by the right tenant at the right rate by doing some homework before you put out that “For Rent” sign.
We asked Brian Estes, one of Dave’s Endorsed Local Providers and a commercial real estate professional in Mississippi, what three things he recommends his clients do when they’re ready to rent out their properties.
Find The Right Rate Terms
Any homeowner knows how important it is to price their home correctly when they’re looking to sell. The same is true when you set the rent for your commercial space.
“Nothing is more time-consuming and costly than to overprice your space,” Brian said.
And under-pricing is no better. Either way, you lose money!
To find out what the going rate is for spaces like yours, ask other property owners with similar spaces that are already occupied. While you’re at it, ask them how their leases are structured. Do they have full-service leases in which the rent covers all expenses like utilities and janitorial services? Or does the tenant pay for these separately? Are the leases one- or two-year agreements, or do tenants prefer a longer term?
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“In the case with Class B and C office buildings, many tenants prefer full-service leases,” Brian explained. “It’s easier to budget, and they don’t have to put up deposits for utilities.”
Making your rental rates and lease terms attractive can make all the difference in getting your space occupied quickly—and bringing in money.
Make It Look Good
Speaking of making things attractive, a good-looking location will attract more potential tenants, Brian said.
“In most cases, there is always room for improvement to the exterior of your property to increase its curb appeal,” he explained. “Current and potential tenants want to have a location they can take pride in.”
On the inside, you can offer your prospective tenants an allowance to spend on improvements if your space isn’t in move-in condition. Or, you can let them choose the paint and carpet that you will have installed.
However, if tenants in the market are interested in leasing a space for two years or less, Brian recommends showing your space in move-in condition. That way, you don’t have to make improvements for a tenant who doesn’t have a long-term commitment to the location.
Go With A Pro
You can make the whole process simpler by working with a professional.
“In some markets, simply posting signs will quickly lease a space,” Brian said. “However, in most markets, good commercial real estate agents have access to databases, tenant contacts and other agent relationships that are critical in getting spaces leased.”