You can generate a reliable, recurring income from investing in commercial properties as long as you approach things in the right way.
You'll only make a rental income when you have tenants, and this is important to think about when your current tenant's lease is coming to an end. If they've been good, you'll want them to renew, but not everyone will want to do this. With effective lease renewal strategies, you can make it more likely that tenants will want to remain in your commercial property.
Let's take a look at some useful lease renewal strategies that you can implement.
Provide Flexible Lease Terms
Commercial leases often last for about three to five years, but you can change this if it's suitable. If you've had a long-term commercial tenant, you might want to consider offering them a more flexible lease.
This could mean having it be as short as one or two years. This kind of agreement can appeal to a lot of tenants.
At the same time, you may have tenants who are happy where they are and could be happy signing an even longer lease. This is more ideal for you as a commercial landlord.
Consider Flat Renewals
Raising rents can increase your profits, but it can also put business owners off. As such, you might want to consider flat renewals. This means renewing the lease at the same price it's currently at.
As long as you're still making a good income, this could be fine for you. If your tenants are happy with the price they're currently paying, they'll have no reason to want to leave.
Bring Renewals to the Renter
A lot of landlords handle things online these days. It makes things more convenient for them and their tenants.
You can make it possible for tenants to renew their lease online. This added convenience can help encourage tenants to renew. It also makes things easier for you.
Use Data to Your Advantage
Data can give you deeper insights into how your properties are performing and you can use this to improve your lease renewal strategies. Advanced tools can collect and analyze data so that you can use it to your advantage. It will help you save time and better understand what your tenants want, allowing you to improve tenant satisfaction.
Offer Upgrades
Upgrading your commercial building is one of the most effective approaches to get your tenants to renew their lease. You can think about upgrades such as:
- Energy-efficient windows
- Smart technology integration
- Improved security
- Remodeling
Anything that offers a functional or aesthetic improvement will make it more likely that your tenants will want to stay.
Implementing Lease Renewal Strategies
Any of these lease renewal strategies can make your property more desirable and tenants will be more likely to consider renewing their lease. To effectively implement them, it may be best to get help from a professional property management company.
PMI Green Country is a full-service real estate asset management company serving Tulsa and the surrounding communities. We have years of experience and use state-of-the-art technology to help us offer the best services available. Check out our commercial property management page to find out more about what we do.
