Are you Ready to be a Tenant?
Qualification is essential when looking to lease a commercial space for your business. You and your new landlord will be making an investment in each other so it’s important to prove to the landlord that you are up for the financial commitment of the move and setting up of the new space.
Landlords must be reassured of the qualifications of their potential tenant. The landlord should be looked at as a bank. The landlord is going to invest funds, resources and time into the tenant. Therefore, like a bank, they need to be reassured that they are lending to a financially stable and professional company to ensure that rent will be paid and the building will be properly maintained.
Proving that your company is qualified to rent takes more than a good credit score. Commercial real estate is generally far more expensive than residential real estate, therefore more proof of qualification is needed. Landlords want to see income, profitability and cash flow, previous year’s tax returns and sources of financing and securitization, if a newer entity. Landlords are reluctant to enter a lease agreement with a business without knowledge of operating history, positive cash flow or strong financial backing, especially if an entity is less than two years old.
Before searching for a commercial space for your company, make sure your financials are in order, you are searching for a space within your price range and have proof of your qualifications readily available for your potential landlord.