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While the aims of landlords, in general, are to keep units occupied and rents profitable, there are other important concerns a wise landlord looking to make long-term gains from the property he has invested in needs to consider.
Such considerations should be directly embodied in the commercial lease agreement, and must be clearly understood by the tenant to avoid future problems.
Items include the security deposit, terms of the lease including the duration, renewal and any clauses in the case of overholding, conditions regarding the use and upkeep of the space they are renting as well as common areas, maintenance and repair, and the like.
Since you may not be on hand all the time to observe and know exactly what is going on in your premises, be sure to hire a good property manager who is knowledgeable of the area and the market. You will need an expert who can build rapport with your tenants, and who is very capable in terms of making impartial reports on possible infractions, and addressing tenant concerns on an immediate basis. If you have several properties in your portfolio, it would be worthwhile to have at least one regular monthly meeting with your property manager so you know what requires your attention, and to simply be apprised of the current state of your property.
Also make sure your property has the appropriate insurance cover, and that your tenants get their own insurance protection for their business as well. Since insurance is a financial matter, make sure you spell this out before ratifying your relationship with a new tenant through a signed contract.
Finally, try to get to know your tenants a little, even after you are done vetting them, and already signed a contract with them. After all, business involves people, and it always pays to be nice.
• Clauses involving terms of lease and renewal must be clear
• Hire a property manager who can address tenant concerns
• Ensure you and your tenants have business insurance cover
Source: Lovely Claire CD, Special to Properties
The writer is a freelancer