The ideal “win-win” situation in commercial real estate investing is when both the renter and the landlord are satisfied with the arrangement. It may seem difficult, but as the owner of the property, you can follow specific guidelines to ensure that all sides are happy. Retaining your commercial renters is vital to the long-term profitability of your real estate endeavor. Your tenants are similar to your business partners in that their satisfaction determines how much money you make. You can minimize vacancies and boost tenant retention by building strong relationships with your commercial tenants.
Install a Property Management Company
“First of all, you want your commercial real estate investment to be a passive experience,” says Joe Fairless of the popular podcast Best Real Estate Investing Advice Ever Show, the longest-running daily real estate podcast on earth, which generates over 500,000 monthly downloads. “And,” Fairless adds, “commercial tenants will expect a level of professionalism from their landlords. This means that you shouldn’t be showing up in person to fix the thermostat or vacuum the office kitchen refrigerator coils.”
A property management company offers tons of benefits beyond handyman-style maintenance services. They provide payment portals for commercial tenants to easily pay rent, monthly and annual reporting for landlords, and more. “The cost of a property management company is easily offset by the value they bring,” Joe Fairless notes.
Provide High-Speed Internet
Whether your commercial real estate investment is a 2-star hotel on a highway roadside or a multi-use commercial building in downtown Houston, your commercial tenants and their employees will expect fast, reliable internet. “In this day and age, no commercial tenant is going to tolerate buggy internet connections,” warns Fairless. “Make sure the internet is in good shape because otherwise, your tenants will be looking elsewhere as soon as the lease is up.”
Responsive communication is another service provided by a property management company, but often, their response to your tenant might rely on your response to the property management company. Make sure that you quickly answer any questions that the PM has for you, especially when decisions need to be made quickly or when permission is required by you. “Remember, responsive in the business world means within the hour or even faster,” says Fairless, “not in a couple of days. Your commercial tenants will expect replies almost immediately.”
You can’t be like the government and offer tax incentives for businesses to stay. But you can offer other things of value, like a 5% or 10% discount for signing a multi-year lease instead of a one-year lease. Another idea for an attractive incentive might be free coffee supplies for the office kitchen for a year, upgraded office carpeting, or something else within your means. “Your small incentive might just be the factor that makes a prospective commercial tenant sign with you instead of someplace else,” Joe Fairless explains.
When you keep the needs of your commercial tenants uppermost in mind, you’re more likely to retain quality tenants. You want to avoid vacancies as much as possible, and these tips will help you achieve that.
Laila Azzahra is a professional writer and blogger that loves to write about technology, business, entertainment, science, and health.