When you’re a landlord and decide to rent to a small business, there are some special tips that you should follow. Renting to a small business can be highly profitable, but you also need to protect your own interests.
So, what can you do to make sure you get the right tenants at a rate that makes sense? Here are three tips to keep in mind.
- Consider working with smaller businesses: The first thing to think about is which kind of business you want to work with. Smaller businesses are great for filling in small offices and spaces that might be otherwise difficult to fill in your space. If those tenants later need more space, you may even have larger rentals available that they could upgrade into.
- Put together the right lease: Depending on the business you’re going to rent to and the ease of filling the space if they leave, many landlords lease to businesses for five or 10 years, but some will have shorter terms, like for two years. If your potential tenant is willing to opt for a long-term lease, you may want to sweeten the deal with a discount or extra amenities.
- Know the market: One of the best ways to get tenants to stay with you is to know the market and who to allow to rent a space. You want to set up your tenant for success when possible. For instance, if you’re renting several spaces next to each other, you may want to vary it to include a restaurant, attorney’s office, movie theater, hair stylist and others, so that foot traffic is more likely to explore each of these options rather than to be overwhelmed with multiple businesses of the same type.
At the end of the day, renting is a good way to make money as a landlord, but you do need to consider who you have as a tenant. The right tenants should be considerate, and you should want to find those who stay the full length of any lease you negotiate. Your attorney can help you set up a contract to assist you with protecting yourself when a new tenant moves in.