To help you achieve the best results when letting your shop, Shop To Let Specialists – Completely Retail have compiled the following six tips. These tips will show you how to choose the right location, select quality tenants and manage your property profitably.
Research the Location
Before purchasing a new building with shops to let, you need to research the location. This will include a number of different factors including: whether there is adequate parking, how much foot traffic the location receives each day, the success of neighbouring businesses and the overall condition of the building. You should also check if there are any changes likely to occur in the near future to the area. For example, the local shops may be doing well right now, but if a major shopping centre is about to be built nearby, then this could significantly impact their business.
Approach Short Term Leases With Caution
Properties that have short term leases or leases that are coming up for review should be approached with caution. When purchasing a new property, there will ideally be a long term lease in place with the current tenant. You should also check that the leases are entirely legal. If mistakes have been made on the lease, then it will be much harder for you to litigate if your tenant does not comply by the terms. It’s also a good idea to have a real estate lawyer look over your leases before you advertise shops to let.
Evaluate New Tenants Business
Before renting you should determine whether your tenants business will provide sufficient revenue to cover their rent. With many types of retail businesses are under pressure from factors such as eCommerce, this is particularly important now. You should also check their past record, and whether they have maintained other successful retail operations. You may also want to ask them if they have had a feasibility study performed for their prospective business. A feasibility study will look at a number of different factors including competition, the facilities offered, the concept and the financial opportunity that the business presents. If your tenant is hesitant about having a study performed, you may wish to discuss the possibility of splitting the costs with your tenant. A feasibility study can save both you and your tenant much more money than it will cost you.
Watch out for Too Much Competition
If a retailer asks you about shops to let, but there is already another similar retailer competing operation in the same line of business nearby, then you should proceed with caution. Ask yourself whether the local area will be able to successfully absorb an additional business which offers the same product line.
Understand Your Tenants Business
As a commercial landlord, it is important to have an understanding of the factors that affect your tenants business. You should understand the factors that drive demand for their retail business and what you can do to help them achieve success. Make sure that you communicate regularly with your tenant so that you are able to spot potential problems before they occur.
Forfeiture May Not Always Be the Answer
If your tenant is in material breach of the covenants of the lease, you may not always want to proceed with forfeiture. When you end the existing tenancy you will incur a number of costs; including re-letting the property, any repairs that need to be made and paying rates on an empty property. Often it will be less expensive to try and work through the problem with your existing tenant, rather than simply ending the tenancy.