Many of our members realise the potential benefits of buying and leasing a supermarket. Becoming a commercial landlord can be an excellent opportunity and a great step to expanding your financial and professional portfolio. The excitement to buy and lease can be high. Still, it’s important to realise that assuming a landlord position over commercial property such as a supermarket should not be rushed into or taken lightly.
If you’re looking to lease your supermarket in the new year, here are a few of the most important things to consider before finding someone to occupy your space.
1. Know Your Tenant
It can be tempting to jump on the first offer made by anyone desiring to lease your supermarket. However, it’s critical to take steps to ensure the validity and legitimacy of your potential renter.
Background checks, interviews, and a thorough vetting of your potential tenant will help you avoid future complications such as failed and missed payments or potential misconduct or property negligence. As much work as getting to know your potential tenant may be upfront, it will help you maintain a successful agreement for the duration of the leasing period.
2. Don’t Go It Alone
If this is your first time leasing commercial property, or even if you’ve been in a landlord position, it’s always a good idea to get a second opinion. Running your leasing agreement by professionals or a property lawyer can help prevent any holes or potential issues in your leasing agreement.
Leasing your supermarket is a great option for many and is achievable. It’s important to remember, however, that a flawed lease agreement can be detrimental to you both financially and personally. For peace of mind, have leasing agreements vetted by a professional before they are signed.
3. Ensure Terms Are Clear
There are a few things that can cause more problems in property dealings than leasing ambiguities. To avoid conflicts surrounding unclear terms, ensure that both you and your future tenant are on the same page and that conditions are stated clearly and explicitly within your supermarket’s lease agreement.
Property use, lease term, repairs and maintenance, and more should be clearly outlined. Roles and responsibilities must be clearly defined. Though many of Australia’s residential leasing markets have laws that favour landlords in disputes, leasing for commercial property is more complex. For all parties involved, it is best never to assume that something is clear unless explicitly stated in the lease itself.
4. Make Sure You’re Protected
Standard leasing agreements cover the most common issues and terms of rental that arise in most commercial property agreements, but not all. For a more detailed, iron-clad lease, consulting an expert in the field is in your best interests. A document that covers all possible scenarios will help to protect you down the track if an uncommon issue arises for you, the property, or your tenant.
5. Understand The Laws In Your Area
Leasing laws vary in accordance with the area, so taking time to review your state’s specific laws will help protect your property and ensure that you comply. Complying with local property laws is critical no matter what property you are leasing. Still, commercial properties such as supermarkets have their own sets of regulations that may differ slightly from area to area. Before drawing up your rental agreement, make sure that your terms are state specific.
6. Expect The Unexpected
If we can expect one thing to be true, it’s that life is unpredictable. What may seem guaranteed one day can become a distant memory the next. Understanding this will help to protect you and your property from variables out of your control. Weather events, irregular property damage, and changes by even the most reliable renter can spell trouble if you are caught off guard. Instead of imagining any scenario as too far-fetched, planning for the unexpected will help guarantee that, no matter what life throws at you, you are prepared.
Commercial Leasing Requires Proper Planning
Even if you have experience renting residential property, commercial property law can be significantly different. While it can be an incredible learning experience and a great opportunity and business venture, beginning the process of leasing your supermarket without being properly informed or prepared heightens your chances of failure.
To give your supermarket the best chance at success, screen tenants carefully, review your lease, and always be prepared for the unexpected. The more work done before the leasing process begins, the more successful your investment will be as time goes on.
IndiHub members have access to a range of resources to help with leasing supermarkets. Get in contact with us if you need assistance.