Being a commercial landlord could be risky. There is a chance that you could find a great tenant, but there is also the chance that you could get stuck with a terrible tenant. This means that you must get your affairs in order right from the start to reduce your chances of running into issues later on. Below are some guidelines to get you started:
Do a Thorough Background Check on Prospective Tenants
Ensure that you know every relevant thing there is to know about a prospective tenant. Request for references from previous or current landlords as well as trade creditors. If the tenant is a limited company, consider researching its shareholders and creditors prior to drafting a lease.
Make Absolutely Certain that All Basic Lease Terms are Clear
To do this, you need professional advice before negotiating and signing anything. This way, you make sure that you are fully protected because it is extremely difficult to renegotiate on agreed upon terms. You should likewise consider getting advice from a professional surveyor to obtain some perspective on the market’s current rental levels.
Safeguard Yourself from Potential Tenant Financial Troubles
Prior to finalising the lease, think about the worst-case scenario and check the tenant’s financial accounts. If they do not seem that solid, consider asking directors to provide personal guarantees for service charges and rent should the company experience financial troubles.
You could likewise negotiate a rent deposit, which should be paid to you by the tenant on day one. If that tenant runs into some financial issue, you could get the rent deposit and will not have to get the court involved.
Learn About Relevant Law Changes
Landlords have benefited from one of the quickest and most effective ways of collecting rent arrears by simply calling a reputable bailiff office and having them take care of the collection. While this is still a suitable and efficient option, you need to be fully aware of the law relevant to using bailiffs for arrears collection. Otherwise, you could be the one in trouble with the law.
While it is highly possible that you land a great tenant that will not cause you any trouble at all, but the unexpected could place your property and investment at risk. To that end, keep these practical guidelines in mind to get it right the first time and avoid potential issues with your tenant.