When you own and rent out a commercial property, you never know what types of applicants might come your way. While you could conceivably rent it out to any and all comers, doing so would likely be a mistake.
That begs the question then: how do you ensure that you choose the best tenants possible for your commercial property? We're going to answer that question for you below, showing you the best practices for commercial tenant screening.
Create a List of Pre-Screening Questions
First and foremost, you need to create a list of pre-screening questions. These should be included on the application and should be used to weed out those who don't meet your qualifications.
Some of the questions to include are the applicant's income, credit score, business type, business designation, employment history, and rental history.
Speak to Them in Person
Talking to someone over the phone enables you to get a decent feel for them. However, it lacks facial expression and body language. This is why, when screening tenants, you're strongly advised to speak with them in person.
This way, you can look into their eyes, gauge their mannerisms, and determine whether they're as legitimate as they seem to be.
Of course, this also gives you an opportunity to show them the property. This way, you can be sure that they know what they're taking on. This will reduce the risk of trouble arising in the future.
Make Sure They're Alright With Your Leasing Terms
While there are some regulations regarding what can and can't be included in a lease, by and large, the choice is up to the landlord. For instance, if you want to only provide 1-year lease periods, you can do so. You don't have to allow 6-month periods or periods of several years of length.
You also have the option to restrict certain types of businesses. For instance, if you believe the business' operations would result in the destruction of your property, you can forbid it in your lease.
In any case, make sure the prospective tenant is alright with your leasing terms. If they sign the lease only to learn about specific rules after the fact, it could result in an array of issues.
Do a Background Check
Finally, you should do a background check on your prospective tenant. This is reserved solely for those to whom you're about to rent the property. It's a last line of defense, so to speak before the official lease is signed.
A background check essentially just verifies the information that the applicant has included on the application. It might also bring up any criminal record that the applicant has.
Need Help With Tenant Screening for Your Commercial Property?
As you can see, there's quite a bit involved in screening tenants for a commercial property. But if you use these best practices when choosing tenants for your commercial space, you should have good success.
Need help with tenant screening? If so, you should consider hiring a property management company. Need a property management company for commercial real estate in Greenville SC?
Look no further than PMI Upstate SC. Contact us now to discuss your property management needs!