When looking to lease or sell a small business property, many potential problems can arise. Small businesses, by necessity, are under more stress than larger businesses, and that stress is magnified when you have competition. So how do you avoid some of the common pitfalls when dealing with small business owners? Here are a few ideas:
How much of the monthly rent should be for your small business property lease?
When looking to lease or sell, one of the most important things that a real estate attorney will tell you is that there is a ‘basis rent’ in place. This means that the landlord’s rent is the amount the tenant pays, every month, to live in the property. However, what percentage of the rent should be for your business?
If you go through the process of lease renewal, you may be tempted to add or take away some of the features of your property lease. For example, you may be able to get a higher lease term, with additional flexibility on the days that you can rent. While this sounds great, you would not want to take this route unless it is really the best option for you. The reason is that it is easy to come up with good reasons to terminate your lease terms such as ‘performance issues’, ‘market conditions’ etc. Therefore, unless you really have a need to stay in your property beyond the initial lease term, do not go in for any extra features.
What kind of market conditions exist for your business property? If you are looking to rent or lease your business property, you may have realized that there are many different kinds of properties available in the market. There are both new and old, second-hand and brand new. The real estate market, being what it is, has a huge bias towards new commercial property. Therefore, unless you are sure that you have struck gold by buying a brand new commercial property, you may want to think about investing your money in an old one, and this too should be the domain of the real estate attorney.
Secondly, when it comes to the condition of your property, do not be shy about taking it for inspection. This should be a regular part of your small business property management strategy, because even if you have found out that the roof is leaking, or the floor is cracked… don’t ignore the problem. In fact, by taking the property for inspection and then rectifying it, you will not only save money on your property insurance (which ultimately helps the bottom line), but you will also end up being responsible for pest control, repair and maintenance and even building code compliance. It always pays to be safe than sorry!
If you have any doubts about the legalities involved, do not hesitate
to seek the help of your real estate lawyer. They will ensure that you have all your bases covered. Besides, they can also advise you on the procedures and documentation that need to be filed for your particular state. Be sure that they are familiar with the real estate laws of the area in which you live, as not every state has the same real estate laws, so having knowledge of them will make life easier for you in the future.
- Another thing that you need to take care of is the ongoing security maintenance that is required of your small business.
- It is quite common that businesses (and even individual homeowners) forget to pay their properties for security services, which lead to vandalism, theft and other related problems.
- However, the best way to keep your property safe is to contract with a professional security service provider
to provide you with on-site security on a monthly basis. It is also important to take into consideration that there are strict laws regarding security of commercial and residential properties within your particular state. Therefore, it would be advisable to research these laws before making a commitment.
Finally, when it comes to small business property management, you should always remember that it is your responsibility to maintain the property and take care of all the necessary issues. Even if you are just paying for rent on the property, it is still your responsibility to see that the property adheres to any municipal rules and regulations. This includes any zoning restrictions and laws that apply to your particular community. You should also be responsible enough to see that all necessary permits and licenses are in force, and that none of the tenants or employees have any criminal records that could affect their performance as part of your small business property management. By keeping all these things in mind, you will be sure that your property looks after you and your business in the best possible way.