Tenants are the most crucial pillar for the success of commercial property investment. They can make or break the deal for commercial investors. They are rightly called as the lifeblood of commercial property investments because finding the right tenants can determine the long term success of investments.
When you find the right tenants for your property, your asset will stabilize in the long term, and you can continually reap its benefits. Gone are the times when investors focused majorly on finding tenants for the property alone. The shift has now been made to finding the right tenants for the property.
If not anything, wrong tenants can waste your time and bring down the value of your property by causing unnecessary damage. While it’s important to entertain all the prospective tenants, what’s more important is finding the right ones, even if that means you’ll have to spend more time finding them.
However, you can rest assured that once you find the best match of tenants for your commercial property investment, it’ll go a long way, and all your efforts will be worth it. This blog is a guide to finding the best tenants for your commercial property investment. Read on and kickstart your journey to finding the best tenants for your property the right way.
How to Find Best Tenants For Your Commercial Property
#1 – Understand the Business Types that run actively locally
There are certain types of businesses that perform better in certain parts of the locality. Depending upon where your property is, understand the most common types of businesses that do very well. It would be best if you always hunted for businesses that do very well in your business locality because you need to ensure that these tenants are going to pay you up on time, every time. Note that some types of businesses can boast of great sales on their balance sheets, considering relocating their business now.
However, this does not mean that these businesses will do great in this locality too. Thus, conduct your market research to know more about the business types that are known to do well in your locality and always have them on the top of your list.
#2 – Conduct ground research on other properties in your locality
Walking around in your locality and understanding how other properties are in terms of maintenance and the quality of tenants will give you a fair understanding of what you’re getting into. Quality tenants in your locality might only be dwelling in specific properties.
What is the nature of these properties? How much rent are these tenants paying on an average? What are the occupancy and vacancy rates of these properties? Are these tenants fully satisfied with the facilities or amenities provided by these properties? How do the landlords manage their properties? Find answers to all these questions and more.
Make a list of everything that pops up in your mind and get prepared to conduct deep and thorough market research. Ask around for more information from the shop owners and other people like caretakers of properties.
#3 – Understand the tenant mentality in your locality
The tenant mentality varies from one locality to another. What may be basic amenities to one set of tenants in one locality might be seen as a luxury to another set of tenants in another locality.
If you do not understand what the tenant mentality is, you might end up under satisfying them or over satisfying them without being fairly compensated for the same. To understand the tenant mentality, again, a little bit of leg work would work best. Go around and look at the quality of tenants occupying similar buildings in your property.
Survey if it seems fit and ask questions that will give you a peep into their minds. Are they completely satisfied with their living conditions? What are they looking forward to in a property that they are interested in relocating to? Is your property suited to meet the needs of a modern tenant?
If not, what are the changes you must make to your property to make it more appealing for your prospective tenants? What will the additional costs be like? Answer all these relevant questions before you fixate on the kind of tenants who might be your most preferred type.
#4 – Determine the right set of tenants you want to target
There’s no point in making your property appealing to tenants who won’t be the right fit for your property. Generally, the income brackets under which your tenants would fall will give a fair picture of what kind of tenants will be the right fit. Further on, if you have any special conditions for your tenants like credit scores, nature of the business, income category, and so on will also count. Take into account all the parameters which will matter and determine the group of tenants you want to target. Make a list of checkboxes for this group and actively look for tenants who check these boxes.
#5 – Choose the right form of advertising
There are various forms of advertising through which you can target your prospective tenants. Choosing the right form is essential to avoid wastage of time and resources. Once you’ve made a list of conditions that’ll make for the right group of tenants for your property type, go ahead, and target your advertisements.
In the past decade, digital advertising or digital marketing is the most optimum form of advertising. Getting listed on various property listing sites could be one of the first steps. Further on, Facebook Ads can also be very powerful in rightfully targetting the right set of demographics for your property.
Take into account your advertising campaign’s various analytics and learn what’s working and what’s not. The end goal should be to get the best out of your advertising spend and digital marketing campaigns in general.
#6 – Sending out direct mails or brochures
Sending out brochures directly to various businesses through Postal service can be very helpful, especially when you want to target the local businesses. Remember to devise good brochures that not only contain all the relevant information about your property, including all the facilities and amenities, but also one that creates an urgency amongst the potential businesses. Quote the current vacancies that are available in your property and also have the information regarding the probable future vacancies.
Include powerful call-to-actions and mention that your properties are open for negotiation or any other specific terms or conditions you want your prospective tenants to know about. Try to highlight the various benefits or the positive sides of choosing to rent your property. And finally, specify the contact details out-and-loud in your brochure, which should include your email or telephone number or both.
#7 – The Cold Calling
Regardless of how advanced we’ve become, it is true that the cold calling techniques still work. Make a list of phone numbers of local businesses and reach out to them individually. Remember that these businesses fall into the category of business types that you’re looking for.
Call them, and after asking them to spare a few minutes of their time, talk to them about the vacancy in your property. It is good to write down a couple of lines that you might want to use to initiate the conversation with them. Don’t talk all about your prospect alone, and try to understand their pain points with their property.
Take notes and know what is truly lacking in the commercial properties locally and pitch your vacancy accordingly. If you know how to carry on a good conversation, cold calling might help you find the very best tenants for your property!
#8 – Email marketing
If you can collect a significant database of the local businesses’ email IDs, conducting email marketing can be very helpful in reaching out to the right tenants. Use good copy for your emails that’ll keep your readers hooked and include many Call-To-Actions urging them to schedule a visit to your property and create a sense of urgency amongst them. Using this regularly can grab the attention, and business owners might reach out to you looking for a vacancy.
#9 – Spread the Word-of-mouth
There is nothing like Word-of-mouth publicity or marketing. It can be very effective and can do wonders in finding your next best tenant. Spread a word about the new vacancy you have at your property amongst your friend circle and your family and request them to generate leads.
Ask them if they know someone who’s looking for a vacancy, and tell them the property details, highlighting the positive sides of moving into your property. You can do the same to the local shop owners in your locality, where you can leave a couple of your advertising brochures and request the shopowner to spread the news of your new vacancy to their customers if someone shows interest.
These are some simple yet effective ways to find the prospective tenants you are looking for. Remember to conduct a brief interview and know as much as you can about your tenants, especially their income flows and business nature, before you close in on any prospective tenant. You can also look at their liabilities to understand their rent-paying abilities in the best manner. Have an open conversation about anything that is on your mind, leaving no questions unanswered in your mind.