Commercial Landlords — Time to Invest Money to Make Money

Every businessperson has heard the old adage:  “You have to spend money to make money.” Commercial landlords would be wise to heed this advice.

Unfortunately, economic times have hit commercial landlords hard since the market tanked in 2008. But that’s no excuse for those still in the game to avoid the realities of their situations:

1.  Tenants are Still Looking for Properties to Rent

Someone is going to win tenants’ leases. Will it be you? Not if you haven’t spent any money fixing up your commercial property in the past three years. Now is the time to invest a little money to make your property “pop.” You want curb appeal, but you also want to fine-tune the interior a bit to make the place look exceptional to potential renters who stop by to take a look.

At the very least, make sure the place is clean and move-in ready — nothing should stand in need of repair or be “negotiable.” Today’s market is not favorable for those kinds of landlord short cuts.

2.  Competition is High

If you want to compete with all the other “hungry” commercial landlords in your area, you have to be willing to put forth an investment. Is your space really worth what you’re asking? If you haven’t pulled the necessary reports in awhile, now’s the time to do some market research and make sure you’re priced competitively in your area for your type of property.

3.  The Market is Rebounding

Certainly, real estate is slow in rebounding… but all signs point to an upward swing. And when that happens, if you haven’t spent anything to help you, you’re likely to reap what you haven’t sown.

4. You Have to Do Your Own Cheerleading

Even if your property is primed and ready for new tenants, don’t expect them to magically appear. You have to do the legwork to move traffic to your commercial property. Start by placing a classified ad in the local newspaper’s commercial real estate section, and check into the cost of advertising in a trade magazine specific to your property’s use or location.

5. Tenants Are Online ... And You Should Be Too

Advertising on the Internet is a crucial step in finding qualified tenants. Add your listing to websites like LoopNet and Craigslist, and always include a picture or two as well as all the wonderful features of your property.

Use a word processing application to create a flier with photographs of the property and pertinent details, such as square footage, parking, zoning, and lease requirements, and save that flier as a PDF. Then email it to colleagues, friends, and owners of similar properties who might be in the market to expand their investments.

Commercial landlords who invest today will be happier – and more profitable – tomorrow.  A little financial outlay can result in huge rewards.

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Top 3 Tips for Finding Good Tenants

Are you a new landlord who isn’t sure how to select a “good” tenant? It’s not rocket science, but there is no set-in-stone formula that works for every prospective tenant and every property, every time. Here are a few tips for newbies out there:

1. Don’t wait until the perfect tenant comes to you; seek him out. Take an honest look at your rental property and surrounding area and decide what the ideal tenant looks like. Is this a three-bedroom house in a quaint neighborhood? Is it a one-bedroom flat in an up-and-coming section of the city? Think about the demographic who will most likely find your place appealing, and advertise where they are. The community bulletin board in the artsy coffee shop just down the block from your flat is probably the perfect place to hang a “For Rent” sign.
2. Credit, credit, credit. Running a credit report on a prospective tenant will tell you a lot more than how much debt they have. You’re not looking at the score, or the debt, as much as you’re looking for the overall history, to get a sense of whether the person is fiscally responsible. Car repossessions, credit card charge-offs, and previous evictions will show up on a credit check, so pay attention.
3. Double-check the dollars. Employment verification is key. Anyone can pluck a figure out of the air and tell you it’s their take-home pay. Verify the prospective tenant’s employment status, not just with a phone call but by requesting the most recent pay stub. A good rule of thumb is to decide the rent can’t be more than 30 or 35 percent of someone’s income. The last thing you want is a tenant who cares for the place but can’t pay the bills. 

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Evicted Tenants Aren’t Allowed On Any Part of Your Property

Eviction notices, proceedings and judgments can be tedious, stressful and time-consuming, which is why so many landlords use every means possible to avoid such a hassle. However, once the eviction judgment has been handed down, it is in place to protect you and your assets from the evicted tenant.

As such, if the evicted tenant is seen on your property — even in the common areas of your apartment complex, even if invited by other residents — that person is considered to be trespassing and you have every right to get law enforcement involved. Chances are evicted tenants return to their old apartments for one of two reasons: 1. To retrieve articles of clothing, furniture or other belongings left on the premises; and 2. To vandalize the property or simply to antagonize the landlord.

Let’s face it, they want revenge, either by taking what they consider to be theirs, or by doing something out of spite to the landlord or the landlord’s property. And they should not be allowed to get that revenge in any way, shape or form. Instead, a restraining order can be obtained to prevent the evicted tenant from returning to the apartment community. Don’t hesitate to file for one, thereby further protecting your assets.

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Don’t Reject on a Rumor. Make Lease Rules Clear and Trust the Tenant

Consider this scenario: A 21-year-old recent college graduate applies to become a tenant of your property. You run a background check, employment check, and credit check and everything comes out clean. But while calling personal references and her previous landlord, you discover that the young woman supposedly has a boyfriend who basically lives with her. Furthermore, there are offhanded remarks made about said boyfriend being an illegal drug user or, worse yet, a dealer.

What do you do? You certainly don’t want to open yourself, and your property, up to potential trouble with the law. And you don’t want anyone living in your property who is not on the lease. But you can’t discriminate against a tenant based on rumors and hearsay.

If you liked the applicant, she gave you a good first impression, and everything in her application and background check turns out solid, then go with your gut to sign her to a lease. But before you do, have a candid talk with the applicant that expresses your rules against people living in the home that are not on the lease, and that breaking such rules will result in eviction. Be stern from the start and allow her to decide whether something is worth risking her financial stability and housing future. Chances are, she’ll either withdraw her application and look elsewhere for a place with a more lenient landlord, or she’ll agree to your terms and hold up her end of the bargain.

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Back to School, Back to Safety: Make Sure Your Property Gets an ‘A’

It’s that time of year again: Back to school season. Now is a good time for landlords to assess their rental properties for any issues that could prevent their tenants or neighbors from staying safe during their commutes to and from school.

If you have a new tenant with children who moved in during the summer, it’s nice to let them know the bus route and approximate bus times, if you know them. At the very least, give them the name and number of the school their children will be assigned to. And if your property includes or is adjacent to a school bus stop, make sure there are no safety hazards in the area. Remove anything on the ground that might hinder small children from getting there, and prune back any branches or other vegetation that could interfere with a bus driver’s line of sight.

Likewise, if you know that neighborhood children use your property as part of their commute to school, make sure signs are in place at proper crosswalk areas and nothing on the property will impede them from reaching their destination.

If tenants have gotten into the habit of parking in spaces that might hinder a school bus from passing by safely, now’s the time to remind tenants about the parking rules on the property and make them aware that children will be out walking during morning rush hours commutes.

It only takes a little effort to make sure everyone stays safe this school year.

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Hire a Tenant Screening Service That Tailors The Reports to Your Needs

Every tenant is different, and therefore no two rental applications or tenant screening reports will look the same. Each time you’re vetting potential tenants, it’s of the utmost importance to get the necessary background information about them to ensure they are who they say they are, with the job they claim to hold, and the clean rental history they say they have.

But every circumstance is a little bit different, and you shouldn’t be forced to pay for a lump of tenant screening services if you don’t necessarily need all of them. Perhaps you already have verified a person’s employment. Perhaps they’ve provided you with a recent copy of their credit report. Whatever the circumstances are, you should hire a professional tenant screening service that is willing and able to tailor the screening service to your needs, only generating those reports you really need and not wasting your time and your applicant’s money with frivolous checks and duplicate reports.

When searching for the right tenant screening service, find out whether they offer different levels of background screening services. Research until you find a reputable company that offers everything from single a la carte screening services, to full-service background screening packages that check everything from employment verification and previous eviction reports to criminal records and sex offender registries. 

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Wisconsin Steps Up to Make Tenant Screening Easier

Tenant screening is a critical step toward a landlord’s successful relationship with a tenant. Recognizing this, the Wisconsin legislature is making it easier for tenant screening information to make into the hands of landlords who need it most.

In the past, local ordinances and laws have made it difficult for landlords to have access to important information regarding a tenant’s previous rental history, credit information, criminal history and other details. But a new statewide law makes it illegal for any city, town, village or county to enforce such ordinances that keep necessary tenant screening information under cover.

The law makes it clear that landlords are free to obtain and use any of the following information with respect to a tenant or prospective tenant: Monthly household income; employment information; rental history; credit report; court records related to criminal history, including arrest and conviction records, to which there is public access; and identifying information such as a Social Security number.

Those in the Wisconsin legislature clearly understand that landlords are not trying to violate a person’s privacy rights by obtaining this information. On the contrary, they’re just trying to protect their own assets and make the most intelligent decision for their business interests (without unlawfully discriminating against anyone, of course). Hopefully more states will follow suit.

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