As a commercial landlord you have made a substantial investment and you probably want to protect it at all costs. For most landlords, commercial or otherwise, this means finding and keeping good tenants who will look after your property and pay their rent on time.
While many commercial landlords prefer to use the services of an experienced property manager there are some who prefer to do it themselves. Unfortunately the DIY approach can lead to a number of common mistakes. Here are four to look out for.
- Not vetting potential tenants thoroughly: When you’re keen to rent out your property it’s tempting to cut corners, but taking the time to root out the quality tenants from the less than fantastic ones is essential if you want to avoid future issues. A high quality tenant will pay off in the long term while a bad tenant can be extremely damaging to your property. Make sure you conduct all necessary background checks before you lease your property to a new tenant, however great they might seem on the surface.
- Failing to create a formal lease agreement: A lease protects both you and your tenants from any misunderstandings. A lease is a formal agreement and it is absolutely crucial if you want to avoid any legal problems and protect your property. If a tenant doesn’t pay rent, or they damage the property, without a lease you’re going to be left at risk of financial liability. It’s important that you get everything agreed upon and in writing before your tenants move in.
- Not enforcing the terms of the lease: It’s one thing to have a lease, but another to actually enforce it. If your tenants are paying their rent late, keeping the property in an unacceptable condition or otherwise failing to meet the requirements of their lease it’s important that you don’t let it slide. If you don’t enforce your lease and then decide to take steps further down the track, your previous inaction could undermine your ability to do so.
- Assuming repairs and maintenance are the tenant’s responsibility: As a commercial landlord you are responsible for structural repairs and other maintenance. If you neglect these you could face legal issues if anyone is injured or property is damaged as a result. Make sure it’s clearly stated in your lease who is responsible for what, and ensure that you meet all your responsibilities as a landlord.
Being a commercial property owner comes with a lot of responsibility and unfortunately mistakes can be serious. Don’t take the risk – hire a property manager to look after your commercial property so you don’t have to worry.