The cost of making the right decision far outweighs the cost of making the wrong decision or making a leasing decision the wrong way.
Waltham, MA (PRWEB) November 29, 2012
During the Great Recession the residential housing market was devastated. Values dropped, foreclosures increased to unprecedented numbers, and new construction disappeared. But just as the residential market got hit, the commercial market got hammered as well. Available square footage for commercial properties increased to all time highs. The prospects for improvement appear bleak. (http://www.zurichna.com/internet/zna/sitecollectiondocuments/en/knowledge%20center/whitepapers/real%20estate/effects-of-recession-on-cre-market.pdf)
However, a Urban Land Institute report suggests a glimmer of hope in 2013:
"The enduring low-gear real estate recovery should advance further in 2013: Emerging Trends surveys suggest that modest gains in leasing, rents, and pricing will extend across U.S. markets from coast to coast and improve prospects for all property sectors..." http://www.uli.org/research/centers-initiatives/center-for-capital-markets/emerging-trends-in-real-estate/americas/
Even with the light of potential recovery down the road landlords and property managers will be challenged to attract and keep new tenants for their commercial space. Rental rates have dropped or remained flat, and may continue to do so in the near term.
The key with Commercial property rental is the same as residential: Attract long-term tenants that fit within the community of businesses for a given commercial property. Long-term tenants equate to stable income flow.
Tenants with long-term plans for occupancy should lock in rental rates for as long a term as possible. Landlords, in contrast, should be eager to offer two or three year leases, to take advantage of better rental rates in the future.
Residential property managers and landlords know the value of building a community of strong, fiscally solid, long-term tenants. A good tenant lends to several key aspects of a viable and healthy residential environment:
- Long-term tenants tend to take care of the property in which they are renting or leasing.
- Long-term tenants build stability in the community in which they work.
- Long-term tenants add to a good reputation a community may acquire.
- Long-term tenants are less likely to be evicted.
Commercial property managers live by the same mantra. Long-term is key. And one of the key tools in creating a long-term tenant is the screening process. A solid screening process most likely will prevent the ugliness and difficulty of eviction.
As part of the screening process property managers should run a Tenant Background Check, one that is very similar to residential tenant screening. Common reports include:
- Credit Report - Depending on business type (ie sole proprietor, partnership, or corporation), a credit report should be ran on individual and/or company.
- Civil Court Records - Reports will show litigation by or against individuals or company.
- Evictions - Similar to residential eviction records, corporate evictions will show similar information.
There are a wide variety of reports that may be important to a property manager in vetting new tenants and a Commercial Tenant Screening is but one aspect of the entire process. A solid review of data as well an interview with perspective tenants will provide the insight and information a commercial property manager requires, and may help prevent evictions. Further, a solid vetting process may reduce the potential risk of property damage, any subsequent decline of property reputation, and the opportunity to create financial stability through a long-term tenant.
TenantScreeningUSA.com recommends in-depth and comprehensive tenant screening not only for residential properties but commercial properties as well. Understanding the financial wherewithal of an individual or corporation is but one aspect of the vetting process. Through the review of public records property managers can make comprehensive decisions that will assist them in creating a thriving financial environment.
In the end cost is always a consideration. But as Adam Almeida, President of TenantScreeningUSA.com suggests, "the cost of making the right decision far outweighs the cost of making the wrong decision or making a leasing decision the wrong way."
TenantScreeningUSA.com provides unique screening packages designed for the specific needs of their clients. With a staff of trained professionals, TenantScreeningUSA.com can provide the information Commercial Property Managers need in making decisions about new tenants. Safe, secure, and compliant, TenantScreeningUSA.com is a low-cost solution in a high stakes world.