Whether you are a commercial or residential landlord the key to the success of your investment is receiving rent. The longer properties are unoccupied, or occupied by renters who don’t pay, the greater your long-term losses.
Landlords can implement a proactive strategy that maximizes their ability to receive rent, retain quality tenants and preserve the flexibility to move quickly to replace non-compliant tenants. If you are a residential landlord, this means ensuring compliance with all housing laws and regulations and robust tenant screening procedures that are compliant with fair housing and equal protection laws. For a commercial landlord, an ironclad lease with third party security is essential.
With commercial leases, workouts can also be a viable alternative for non-paying tenants. Workouts are an opportunity to retain quality tenants and ensure a level of cash flow. It also presents the opportunity for additional lease provisions to expedite the return of the property should a tenant default. Workouts should also include formulas for increasing the rent based on an improving economy.
If you haven’t had your lease reviewed or updated in the last several years, now may be the time to do so. Out of date leases can increase landlord losses. While the pandemic has created significant challenges for all types of small businesses, it also creates opportunities. By selectively reconfiguring your tenant base there is a chance to increase your long-term return on investment.
Call Bruza Law, (734) 335-7695 for an initial no fee consultation.