If you are planning on renting out your commercial property, you need to be careful of who you rent to. Much like any landlord, you will need to make sure that your new tenants are going to take care of your property and keep up their payments for it. If you choose the right businesses to move into your property, you can actually increase its value just by having them around. Here are some tips for choosing the right tenants for your commercial real estate.
High Traffic Means High Demand
If you can rent to a business that you know will bring a lot of traffic to your property, you will generate a bigger demand for the other property in the area. For example, let’s say you have a strip mall that Best Buy wants to move into. Because Best Buy is already a highly sought after store, other stores in the area will want to move close to it. You could raise your rent prices for future tenants because you have the traffic they need to succeed. Best of all, they will be willing to pay whatever it takes to get near those big businesses.
Businesses That Send The Right Message
If your commercial property is near a school or family neighborhood, you may not want to allow an adult novelty shop to rent from you. While their business will not impact your income much, it could impact your reputation in the community. This isn’t to say that you cannot rent to a liquor store, a cigarette supplier, or even a strip club. You just have to be careful where you allow those tenants to be. At the end of the day, you want to have a tenant that reflects the community around it.
Competition Can Lead To Trouble
If you have a strip mall or small shopping center, you really don’t want two businesses in the facility that work in the same industry. In other words, you might not want to have two bakeries in the same complex. You could turn the whole center into a themed mall, where you have a full line of shoe stores, clothing stores, etc. However, if you just have two or three shops in the same niche, you could be in trouble. Choose tenants that serve the same audience with different goals in mind, and you will be able to get the most out of your rental agreements.