Common mistakes made by commercial property tenants
There are plenty of things that can go wrong or shock surprises that can pop up when you’re a commercial tenant. Unfortunately, these mistakes can be costly and jeopardise the future of your business.
So we’ve put together a list of easily avoided mistakes for you to learn from.
Although, perhaps the biggest mistake commercial tenants make is not learning the first time! So take qualified advice and learn from these common mistakes:
Not allowing enough time
This is the number one mistake but most tenants, and that is not allowing enough time when it comes to executing your property strategy. At any stage of your tenancy, you need adequate time to be comfortable, achieve your goals and follow your business plan.
The time leading up to the end of your lease is particularly important, especially if you intend to leave the property. Relocating to a new premise has huge amounts of work involved. When you’re on the hunt you’ll need plenty of time to research, compare, select potential sites and conduct property analysis and inspections. Once you’ve found the perfect fit, you’ll need to enter into negotiations, secure approval, prepare all legal and financial documentation before executing plans and the fit out for your new space.
So, if you don’t allow yourself enough time, you could end up rushing these processes. For example, a rushed property analysis and planning phase may get you inaccurate estimations of space requirements, while limited research time may have you unknowingly paying way too much rent compared to market trends. Worst case scenario, you’re left stuck in your current premises or with nowhere to go when your lease is up.
Even if you’re renewing your lease, you still need plenty of time to enter into any negotiations. Rushed discussions may leave you settling for a price you’re not happy with or agreeing to conditions that will cause hiccups for you in the future.
Not reading and understanding the fine print
Many will admit to not always going over the T&Cs but when it comes to your tenancy, reading and understanding the fine print is a must. You need to know exactly what you’re getting into and every clause.
Not tracking key dates and deadlines
Not staying organised with your important dates can be costly, chaotic, and see you miss big opportunities in the future. You will risk violating your lease and open yourself up to trouble with your landlord and the courts (and incur big legal fees in the process). Especially if you become unreliable with rent payment dates, it can be extremely damaging to your relationship with your landlord and you can risk your lease not being renewed or terminated early.
Important dates and deadlines to stay on top of include:
· Lease signing
· Handover date
· Lease commencement and renewal
· Rent commencement
· Lease termination dates
· Notice of intent dates
· Property inspections
· Rent reviews and increase dates
· Expansion options
Not looking at the bigger picture with your property
When selecting the perfect space, commercial tenants can often hone in on the costs without considering other factors. But while a space might appear cheaper, it may lack the technology, facilities, accessibility or appeal your business requires. These factors can also influence the effectiveness of your PR and marketing strategy, and the quality of employees you attract, culture, and overall work place wellbeing. Today, the workplace environment and employee experiences are highly valued by workers, so you want a property that ticks all the boxes.
Not keeping your goals in mind
You need to act with your defined business, finance and real estate goals in mind. What type of demographic are you targeting? What technology do you require? Do you have plans for expansion? Factors like these will heavily influence the type of property you seek and the level of flexibility it possesses.
Doing it all yourself
You may think you’re saving money by doing it all yourself, but in the long term it will leave you with increased costs, wasted time and a huge headache in years to come.
You need a team who can provide specialised expert advice and tailored knowledge on everything from legal terms to negotiation, rent valuations, logistics and space planning. Trust us, the cost of hiring a professional is far cheaper and greater value for money in the long run.
Not working with a tenant representative
Team up with an expert tenant representative who can guide you through every stage of your lease, and keep you organised and prepared for any event that may arise.
Contact us to discuss your needs. No obligations.
Managing Director, Broadway Property
Director, Broadway Property