Starboard Commercial Real Estate

Hans Hansson | September 11, 2006

There are several "dos" and "don'ts" that should be followed by both the landlord and the tenant in a leasing transaction to secure office space. Here is my breakdown of dos and don'ts from the landlord's prospective; follow these guidelines to achieve a more successful negotiation.

Landlord's Dos:

- The market is hot; make sure you maximize your potential rental rates.
- Keep your tenant improvement costs as low as possible.
- Keep rent concessions to a minimum.
- Make sure that the lease includes at least a CPI increase or a fixed-rate increase every year.
- Expose your property to as many prospective tenants as possible to keep the building in a competitive position.
- Keep legal costs down in lease negotiations.
- Keep legal costs under control by using a balanced lease that will be subject to less change.
- Keep your vacancy rates on par with or less than your competition.
- Maintain a modernization plan that keeps your building up to date.

Landlord's Don'ts

- Don't wait to secure the highest rental rate possible. Profits could be washed out by additional vacancy time; in addition, market conditions could change rapidly. Remember 2001 and the dot-com crash.
- Don't rule out tenant improvements-losing a proposed tenant by refusing to make improvements could lead to additional vacancy time.
- Don't make the mistake of not using free rent to secure a higher contract rate that could be more in line with the market if rental rates continue to grow.
- Reward brokers but don't make the mistake of cutting out promotions as well as fees as the market tightens again. If you are not competitive in these areas, you risk fewer tours, which mean less qualified tenants, which could lead to longer vacancy times.
- Don't keep rental rates high and accept a high vacancy rate while waiting for market conditions to improve. High vacancies could lead to high tenant improvement costs and free rent as additional concessions.
- Don't discontinue modernization plans in a hot market. A modernization plan takes months to develop and build out. Tenants want the level of service and quality of appearance to be maintained over the life of their lease. This may attract them to stay for another lease term, saving you thousands of dollars in downtime, leasing and legal fees, and tenant improvements.
Posted 13 years, 2 months ago on September 11, 2006
The trackback url for this post is http://blog.starboardnet.com/bblog/trackback.php/64/

Comments on this post:

Re: The Landlord's Dos and Don'ts of a Deal
Tips for Being a Successful Landlord

In today’s apartment rental market there are several things that are “must do’s” for becoming a successful landlord. The reason you’re playing the real estate rental game is to have the check in your mailbox on the first of the month, right? Here are a few tips that can help you to achieve this with as little aggravation and frustration possible.

First and foremost is finding the right tenant to rent your apartment, house or other rental. This is the most important ingredient in the recipe. Checking the prospective tenant’s credit history to make sure they are paying their bills is one of the best ways you can screen. A tenant that pays their bills on time most likely will send you their rent on time. Establish a clear system on collecting rent, handling complaints from the tenant and how you will contact them if you need to gain access to the apartment.

Secondly, get all the important terms of the tenancy in writing. You have the option to have a basic rental agreement or draw up a formal lease. Whichever you decide, the important thing is to document the terms that you and the tenant agreed to. Clarify who is paying the utilities, the rental price and any other agreements made between you and your tenant.

It’s a good idea to stay on top of the repair and maintenance needs of your property. When you are notified of something that is broken or not working, repair it as soon as possible to prevent further damages. You may also lawfully enable the tenant to withhold rent, sue for injuries caused by defective conditions or move out without notice.

On a similar topic make sure you are carrying enough property and liability insurance to cover yourself in any situation. A well designed insurance program can protect your rental property from losses caused by everything from fire and storms to burglary, vandalism, and personal injury lawsuits.

I hope that this has been helpful to you. Just remember, as long as you follow these simple tips you will be on your way to a happy and fulfilling landlord future. Best of luck!

ABOUT THE AUTHOR: Eric Goldstein, associated with www.AllSpaces.com which Conveniently Connects All People with All Spaces in All Places, has been dedicated to the real estate rental market for over 8 years. He has assisted over 25,000 landlords with their renting needs. Any questions about renting apartments, houses or other rentals feel free to visit www.AllSpaces.com or email him at Eric@AllSpaces.com.

2006/10/12 by Jamie • • Reply
Comment Trackback URL : http://blog.starboardnet.com/bblog/trackback.php/64/18764/

Comments have now been turned off for this post



Real Estate Blog Top Sites Blog Flux Directory  Real Estate blogs   Top Blogs
Credits: ©2018 by Starboard TCN Worldwide Commercial Real Estate
Powered by bBlog | template by Starboard Commercial Real Estate, inspired by dmig