Keeping Good Tenants
Today’s post will conclude my series of posts about tenant quality.
Let’s say you’ve got a good tenant, by luck or good management. Now what?
By corollary, if getting a better tenant makes your property more valuable, getting a worse tenant makes your property less valuable. So, it’s worth looking after a good tenant.
How do you look after a good tenant? You’ve already got a lease which guides you and the tenant about what you can and can’t do. For me, looking after a tenant means being flexible, and caring about the tenant’s business.
Examples:
- I had a tenant who had recently taken over a business (which had been running poorly), and was in the process of building it up again. She was finding the first few months tough, and a rent-review fell due. I could have raised her rent 5%, instead I raised it 2%. She was very grateful.
- I allowed a tenant to have a pizza oven installed, which required a new hole in the ceiling and roof. This was on the condition that he repair it all at the end of the lease. The pizza oven helps the business.
- Doing some cosmetic work to the grounds (garden), so the tenant’s business will look better.
None of these are required by the lease. I could say no to all of these things. But it pays to have a happy tenant, who is not whining or blaming you, the landlord, for problems in their business. It pays most of all to have a tenant who is reliable at paying rent.
What am I not willing to do for a tenant? Accept late rent or non-payment of rent. As soon as a tenant has problems paying rent, I want to talk with them. I want to find out whether it’s a one-off, or there’s a long-term problem. If there’s a long-term problem with the business, I don’t want them as a tenant!
Well, that’s enough about tenants for now. Starting tomorrow, I’m going to repost some articles I wrote some time ago - the original 5 parts of an introductory course on Commercial Real Estate Investment.