Landlords run background checks on potential tenants and ask for references. Most commercial landlords ask for personal financial information in addition to information about your business. Because landlords hold the key (literally) to commercial rental properties it is easy to lose sight of the fact that you are really the one in control.
You do not have to sign a lease and a high-pressured attempt to get you to sign a lease on the spot is a good sign you need to walk away. A desperate landlord may not have the resources to maintain the property, or not care about the quality of their tenants.
A good landlord will look for tenants who will add value to the property by bringing in the right type of business good for other tenants and the surrounding community.
Commercial leases are often longer than housing leases, and landlord often ask tenants to sign a three to five year lease, or trick them into a Triple Net Lease. Before you submit an application, it is important that you do your own homework and check up on a potential landlord. A nightmare landlord can ruin business for you in even the best of locations.
Consider Talking With A Business Mentor
If you are new to business, or planning to sign a lease for more than one year, you might want to talk to a business counselor or mentor to get ideas about finding the right location for your business.
There are many services that offer free or low-cost business mentoring to help you make business decisions. A wonderful, free service to try is www.micromentor.org. You fill out a questionnaire and are offered a selection of mentors that match your criteria.
Another great resource for established business owners and start-ups is SCORE, a government sponsored program with local chapters throughout the United States. SCORE offers free information, resources, tools, and low-cost (or free, depending upon your location) seminars to help you start and grow your business successfully.
Check Out A Landlord's Reputation
Contact your local chamber of commerce and ask questions about how well other business owners are doing in the area and if they offer programs to help promote new businesses. Casually mention to property and property owner you are considering and ask if the chamber representative can offer you any insights. If there are local business meetings you can attend, or a network to join, do so, and ask other business owners if they are familiar with the landlord or management company.
Check out the company who owns the building with the Better Business Bureau to see if there are complaints against the owners. However, be sure you check out the company who actually manages the property. Building owners often hire a management company to collect rents, manage and maintain the property, and handle all tenant issues.
A landlord will probably charge you an application fee. That fee is used to cover the expense of checking out public data available about you and your business including credit scores and to see if you have a criminal record. There are many low-cost services online you can use to run the same check on your landlord.
Pay Attention -- And Bring A Friend
Take a friend, business partner, or family member with you when you tour a property. Having a second pair of eyes is important because they may see something you miss in your excitement.
If you see a lot of "for lease" signs it could be the weak economy - but it could also be the signs of a landlord that does not pay attention to the property and other tenants have left for non-economic reasons.
Interview Existing Tenants
Before signing a leases or a sublease, you should talk to other tenants in the same building or location that you are considering and ask questions about the landlord. A property might be in a great location, but if you have a bad landlord it could hurt your business.
Questions to ask other tenants include:
- Does the landlord fix things quickly?
- Does the landlord return calls within one day?
- Has the landlord tried to increase your rent or charge special fees for taxes, roof work, or other improvements?
- Is the landlord professional and polite to tenants and their customers?
As you tour the property and talk with other tenants be observant:
- What are the other tenants like?
- Are they quiet or noisy?
- Do they take parking spaces from other tenants?
- Are they rude to other tenants' customers?
Checking Up On Landlords and Business Tenants
You can also use search engines to check up on your landlord by searching the property name, the landlord's name, and the names of other businesses. Search on their names plus the words "reviews" and "complaints."
By checking out complaints other tenants nearby you may be able to see if customers have complained about poor lighting, parking problems, bad security, etc.