If you were to go back in time and tell someone six months ago that the world would be the way it is today, they’d probably either laugh in your face or offer to call someone to help you. Unfortunately, this isn’t some weird nightmare we’re all collectively sharing. We’ve had to change our entire lives and what seemed almost guaranteed yesterday is under fire today. So, how do we protect our interests and make sure we come out the other side of this relatively unscathed? We haven’t got the answers to everything, but we do know how to keep your property investment safe:
Call In The Professionals
If you haven’t already employed the services of a commercial property manager, now is the time to do so. If you do have one but haven’t spoken with them in a while, get back in touch. While no one has dealt with a crisis of this scale, your property manager has certainly dealt with the specific problems you’ll currently be facing. Tenants can default on their lease, damage properties or generally make a nuisance of themselves no matter what stage the world is in and your property manager has likely seen it all before. In other words, they’re your biggest asset right now, don’t let their skills go to waste.
Although no one probably thought things would ever go sideways on such a large scale, we all know that investments come with risks. That means you’ve probably got a contingency plan in place for basic issues such as non-payment of rent. It might be a good idea to assess your options before giving your tenant the boot. However, once they’re out you’ll be left with an empty building that needs a business to call home. We’re not suggesting that you should allow rowdy tenants to stay on rent-free, but if you have a good, long-term tenant who’s always paid on time before and doesn’t cause damage, it might be a good idea to consider allowing them some leniency now. They’ll appreciate the reduction and you’ll keep some money coming in.
If you’ve already lost your tenant, now could be a good time to look into utilizing your building in a more creative manner. Setups such as co-working spaces and casual offices are becoming popular and if managed correctly, they can bring you a higher return on investment with just as much stability as having a single long-term tenant would. You’ll need to put a few extra safeguards in place before switching to this way of doing things but your property manager will be able to take care of them easily enough for you and short-term leases are popular now, as well.
By the same token, a tenant who is having trouble making their rent may be open to sharing their space in exchange for a temporary reduction. Offering this option can protect your property and income while also creating the possibility for an increased return if you can offer a rate that is deemed fair by your additional tenant and bumps up your weekly rental cost.
The nature of business is that we have to adapt and at the end of the day, commercial property investment is just as much of a business as the one your tenant runs out of it. Consult with a professional who has seen this all before (albeit on a smaller scale) and follow their advice as closely as possible. Good luck!