Renting commercial space, how hard can it be?
My experience on this subject is limited so I probably shouldn’t be giving too much in dept information. But, I do have some knowledge on the subject, so I’ll share parts of that with you.
I’m only renting commercial space on one location at the moment. It’s a restaurant in Sweden that works great. I have a good agreement with my renters. The agreement is a major thing
when in commercial real estate. Most renters will need a lot of equipment, installations and tweaks of any given space in order to do their thing. All that can be quite pricey and needs upkeep. In order for you to avoid excessive running costs and unexpected costs, make sure the tenants have to take care of and pay for the costs involved with running their business.
Finding good tenants for commercial spaces can be a lot harder than finding good tenants for a home. Most commercial landlords have to help their tenants set up the space with everything they need to make money. That doesn’t usually mean that the landlord is paying for it, but rather financing it with the intention of making the money back through a higher rent. They do this because businesses need their space and equipment to make money. When they make money, they can pay for expenses. It’s hard, demanding big initial payments from a business that isn’t making money. If you are too set on were your new tenants paid for all the costs involved with moving in you might cause a catch 22 where they can’t get going and you can’t get money.
This sounds like big business, but it ranges from the top down to the smallest properties. I helped friends install a new utility tub and water heater in their 600 sq.ft. garage/ office for a new renter who is going to detail luxury cars. That renter is going to live in the office and work in the garage. As they put the ad out for the space here in Florida, 9 out of 10 renters wanted to live in it.
I’m pretty sure Sweden would be the same at the moment. There is a shortage of homes to rent in both Sweden and Florida. Good for us owners :) Renting commercial space works well if you have the right space on the right spot. Your tenants are more invested and will likely last longer. You will be more sensitive to economic downturns, but most likely make more money during the good years.
And almost forgot! Most of the maintenance and upkeep, pay for by the renters, instead of being a landlord issue.