Commercial leases usually last three to five years, and renewals depend heavily on a solid relationship between the lessor and lessee. Keeping commercial tenants isn't only about offering the lowest possible rent on the market. The professionalism you show, the speed with which you address issues, and how you might support their operation all increase your chances for year-over-year renewals.
If the time for renewal is approaching, and you're set on keeping your commercial tenant for another period, what sorts of things can you do? Read this brief guide for inspired lease renewal strategies.
Renewal Options and Negotiability
As far as pure strategy goes, nothing works better at securing renewals for commercial property than starting the conversation early. We suggest that commercial landlords include renewal options in their lease contracts right from the start.
This type of option gives tenants "first dibs" if they want it. Ensure that you outline a simple manner in which the tenant must exercise their option if they want to. Overcomplicating this with formalities is counterproductive.
Renewal Incentives
Offering your commercial tenants a renewal incentive can further strengthen the option strategy. Depending on your ability to extend such a bonus, you can offer a lower-than-average increase, no increase, or even a reduction. Being willing to negotiate helps more here than any hard-and-fast rule.
Quick Response and Service
Keeping your commercial tenants happy is another solid way to increase renewals. There are several approaches you can take in this regard.
Firstly, you can make reaching and dealing with you as simple as possible for your tenant. Keep your phone lines open, respond quickly to emails, and make the rent payment process simple.
Secondly, be sure to jump on maintenance issues promptly. Tenants appreciate this more than anything else in a landlord.
Lastly, ensure that you can quickly send documentation and reports to your tenants at their request. In business, there's nothing worse than a paperwork delay when you're dealing with an audit, loan application, or other such processes.
Using a tenant portal makes much of this possible. Our property management services include the setup of such a portal.
Competitive Pricing
The ultimate draw in a competitive market remains competitive pricing. You have to make sure you can match or beat prices in Greenville, South Carolina (or your locality if you're in a different area). However, we don't want to focus on rent alone here.
Service charges can add up significantly on top of monthly rent. Applying fewer service charges makes tenants want to stay in your commercial property.
You can achieve this by including foreseeable charges in your rent and sticking to that budget. Outsourcing the service to property managers can also reduce costs, as outsourcing saves money in the right circumstances.
Layer Your Lease Renewal Strategies
These lease renewal strategies increase the chances that your tenants will sign on for another period. Options, incentives, and advanced notice make admin easy. Fast response and great prices make working with you a pleasure.
However, you'll have even more success by employing multiple strategies. PMI Southern States is here to help you do that.
We bring over two decades of property management experience to the table. Get in touch with an expert today, and we'll help you set up a layered lease renewal approach in the Greenville area.
