As a commercial landlord, your goal is probably to find tenants to commit to longer-term leases to ensure a steady stream of cash flow. But at some point, you’ll likely have to turn over a property from one tenant to another. Here are four steps to prepare for if that’s a task you’re faced with.
1. Make necessary updates
The start of a new lease is a good time to make updates to your commercial space so you’re more likely to avoid complaints from your incoming tenant. Check to make sure all fixtures are functional. You may, for example, need to update some lighting or replace older ceiling fans, if your building has them.
You may also, depending on the setup of your space and needs of your incoming tenant, need to install more outlets, put up walls, or tear some down. Assess your space and prioritize updates that will have the greatest impact. You might also decide to make cosmetic updates, like painting the walls or replacing worn carpet.
2. Do a deep clean
Once you’ve updated your property accordingly, it’s time to get it looking as clean as possible for your incoming tenant. Don’t be afraid to shift around old workstations or cabinets to clear out dust and remove stains. Pay extra attention to carpets, which tend to be dirt and allergen magnets.
Also, don’t neglect your property’s windows and window treatments. Blinds and shades have a sneaky way of accumulating dust and grime. You may, in fact, end up needing to replace some.
3. Secure access for your new tenant
Depending on the setup of your building, there are different steps you may need to take to give a new tenant access. If your tenant is renting a stand-alone unit, like a storefront, you’ll need to change the locks and equip your tenant with a new set of keys to access the property.
If you’re renting out a floor or two of a larger office building where the locks are all centralized and electronic, you’ll first need to make sure your old tenant’s entry cards are deactivated. Then, you must issue new entry cards for your incoming tenant. Some of this work may need to be done once your tenant occupies that space. For example, you may need to issue individual access badges for new employees that require a photo ID, which you can’t take until those people come into the building itself. Either way, let your tenant know exactly what to expect as far as building access goes.
4. Prepare for a walk-through
It’s common practice for commercial landlords to charge security deposits, just like residential landlords do. If you’ve done this, you’ll need to prepare to do a walk-through with your incoming tenant to get on the same page and document the state of your commercial space before that tenant moves in. Set a date for that walk-through, but before it happens, do one yourself to get a sense of your property’s condition. Also, prepare any forms you might want your tenant to fill out during that walk-through.
The Millionacres bottom line
Preparing properly for a new commercial tenant can be time-consuming, so budget accordingly, especially if you’re not looking at a huge gap between when your former tenant vacates and your new one is set to come in. With any luck, you’ll have nothing but a smooth transition.