What Do Landlords look for in Lessees?
There is no doubt that New Jersey offers a plentiful amount of commercial properties to lease out to promising companies, whether they are start-ups or if they are well-established, many options exist in the market. One question that many renters forget to think about is, “what does the landlord expect?”
As much as you’d like to get into a new property and start making money, you have to consider the other side of the business deal, the landlord. Owners of these properties care about the sites they rent out and don’t want to worry about having a bad tenant.
Some of the things landlords check may surprise you, but being prepared can help:
- Set Rules – Some landlords form regulations and guidelines for using their property. Keep in mind the landlord is just trying to protect their assets. Typically they will be enforced through a lease document that gets signed between the tenant and the landlord to clearly communicate the proper usage.
- Credit Score – This score can quickly provide the guarantor’s and tenant’s financial condition. The lease will only be as strong as the score but being prepared with other assets like cash can increase the odds of approval.
- Transfers – In the event you ever want to transfer your business to a new owner, you have to keep in mind that the landlord may have some control over that transfer. At the end of the day, you are leasing property from a landlord who put trust into your business being profitable and you met all of their requirements to use their site. If you plan on transferring your business, that new business owner should also meet those requirements.
- Insurance – Having safe-guards and protections set in place like insurance is something that a landlord will expect. Being able to verify an insurance policy to a landlord will provide an adequate safety net against unexpected events.
- Plans – Sometimes landlords like to look over business plans of prospective tenants because they want to make sure you will be a good fit. The ability to review a business plan gives the landlord a better perspective of your goals and outlines the financial commitment you can provide to them. Also, they may evaluate whether you have the value of synergy with other businesses. If you can make a positive impact on other companies nearby, that factor will increase the likelihood of leasing.
Landlords use their commercial properties as investments from lessees and expect a great business relationship from one to another.