Losing Tenants & The Impact To Your Business
When buying a commercial property as an investment, the tenants and lease period are key to profitability.
When buying a commercial property as an investment, the tenants and lease period are key to profitability. Tenant retention is absolutely critical to ensure profitability on a commercial investment for an owner, and to keep your tenants happy is more cost effective than sourcing new tenants.
For any commercial property owner, the loss of a tenant can have significant ramifications, especially to the profitability. This is mostly due to the significant costs of attracting a new tenant.
Costs to consider include the pre-letting marketing costs, the loss of rental income for a minimal period of about 3 months, and the repairs required to maintain the unit in a functional and attractive way. In a difficult market, the 2-3 months of vacancy can quickly escalate to 6 months and longer. This will have a significant impact on your profitability and turnover.
Therefore, it is important to find ways to encourage clients to renew their leases and retain existing tenants.
Developing a good relationship with your tenants and providing good customer service in the event that they require assistance with the property, provides a great platform to ensure your tenant signs a longer term. In some circumstances, despite a good relationship with the tenant, their business requirements may change, and they may be looking to downscale or grow their business. Holding a good relationship with the tenant allows you the benefit of learning of their plans well in advance and pre-planning to find a new tenant, and so reduce the vacancy tenure and minimise your losses.
Please feel free to contact the in2assets letting team to assist with your vacancy by calling 0861 444 769, or via www.in2assets.com