3 Best Ways to Find Good Tenants
There are two types of tenants in the market: the good ones and the bad ones. While great tenants can provide you a good experience, with minimal concerns, the bad ones can be really problematic in many aspects, such as payment, maintenance, demands, and many others.
Therefore, finding the right tenants can feel like treasure hunting. The process can be time-consuming, draining, and complex, especially if you are new to the entire experience. But with patience and the right strategies, the outcome can be rewarding.
There are definitely ways you can reduce these concerns. Here are the 3 best ways you can find good tenants for your commercial real estate property.
Study the market
If you are still on the first stages of vacancy and still preparing your proforma, or your property’s financial statements which can determine its projected profit and lease rate, then one of the best things to do, at this point, is to first study your market.
This is particularly helpful to first-time property owners looking for tenants or those who are still new to the entire business of leasing. Study the market for the standard rates and the inclusions of provisions and amenities. This way, you can evaluate the quality of your property, as well as the amenities you plan to provide. You also get to adjust your lease rate, if necessary, based on the current market trends to either line the rate with your inclusions or lower the rate to create an advantage.
Present a well-groomed property
As a CRE property owner, you must never take for granted the power of a first impression and how this influences potential tenants to choose your spot for business. And perhaps there is nothing more effective in attracting tenants and eventually landing on the best one among all the applicants than improving your property and making it more attractive and convenient to your target market. This includes improved maintenance to make the grooming efforts very apparent, considering your property design and how this can align to potential businesses that your lessee may partake, securing available and useful amenities, and promoting your location as hub of the consumer population.
With this being said, you should work on the overall package of your property. More than just the clean and crisp aesthetics on the outside, ensure that all utilities are also well-taken care of. This is considered a standard protocol in marketing your property but taking it to another level definitely elevates your chances of attracting more potential tenants. This way, you can turn the tables and be the pursued, instead of the pursuer.
Employ a Commercial Real Estate Broker
By the time you settle your proforma, decide on your lease rate, and prepare all your necessary documents, the next step is to hire a commercial leasing broker. There is a reason why these brokers exist in the industry, and their purpose is to serve as intermediaries between CRE owners and their prospective clients/tenants. Hiring one is among the easiest ways to find good tenants for your CRE property once the urgent need arises.
Basically, your broker will do the legwork for you, such as advertising, cold calls, canvassing, gathering potential tenants, and helping you screen them.
Your broker may initially post your property online as part of the first phase of finding tenants. There are free-listing sites available that they can use, but a good leasing broker will have premium paid sites they use to market your property. Since these sites are a magnet to potential tenants, targeted market is already a guarantee. However, these sites also pose competition since your property is posted against other lessors.
Your broker can also use social media to advertise your property. After all, majority of online users spend most of their time in these sites. Brokers just need to filter the audience to target your desired market.
As mentioned earlier, a good leasing broker will also cold call, canvass existing tenants within a 5-mile radius to drum up activity. They will also book tours with prospects to visit the property, manage the transactions and negotiations with potential tenants through these online venues.
On the other hand, you must note that advertising your property online is a game of patience. Depending on the amount of available space near your property and the average time space is staying on the market, patience is something that’s needed. In addition, your broker also has to answer all queries via phone or email to be able to identify potential tenants who are most likely to commit to your property.
Matching clients to your preferences
Working with a professional broker helps give you the privilege of declaring your preferences on tenants. While the goal of finding potential tenants is to gather as much interested applicants there are, it helps to discuss your preferences with your broker so he/she can efficiently work around these terms and conditions in discussing with potential tenants and getting them interested. This saves much time for both the lessor and the potential lessee.
Needless to say, these commercial real estate brokers are in contact with numerous potential tenants and work hard to find the right properties for these tenants. Therefore, this simplifies the entire process since your broker can promptly match you with a potential lessee that fits your preferences.
This will save you much time and stress since majority of the procedures are taken care of by your broker. You might as well leave the entire transaction to your broker while you tend to your personal or work matters while waiting for occasional updates.
More efficient negotiations
If you are also employing a commercial lawyer, both of them can actually work together to ensure that the entire process will be seamless and convenient for both parties. This includes efficient negotiations on payment and commission. Having two professionals on your side is a huge advantage.
Remember that you can always get all the help you need but in deciding on the eventual lessee of your property will be significantly based on your personal judgment. Take note that as a CRE property owner, you are looking for a long-term and committed lessee with no negative leasing history, and most of all, negotiates with you until you both settle on a fair agreement. That’s when you know you got a good one.
Even after outlining all the information above, finding good tenants can still seem daunting. That’s why the Leveraged CRE Team at Commercial Properties, Inc. is here to help you achieve your business and investment goals. Contact us at (480) 330-8897 or send us an email at firstname.lastname@example.org.
Need help on how to get started investing in commercial real estate? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!
Phill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns.
Bookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCRE