10 simple steps to successfully renting out a retail space

If you are a property company, private landlord, or business looking to rent out your vacant shop for rent, it's essential to do it methodically and take into account several factors. This way, you avoid being in a situation where you can't rent out your retail spaces, leading to significant losses on rent.
7. September 2023 | Author: Editor
10 simple steps to successfully renting out a retail space

If you are a property company, private landlord, or business looking to rent out your vacant shop for rent, it's essential to do it methodically and take into account several factors. This way, you avoid being in a situation where you can't rent out your retail spaces, leading to significant losses on rent.

If instead you're looking to rent a shop, check out the guide on How to rent a shop - The 8 most important steps.

1: Start the renting process quickly 

As soon as your existing tenant terminates their lease, landlords typically have at least 3 months to find a new tenant. However, this can vary from contract to contract. Therefore, the first thing you should do is check your lease agreement to know how much time you have before you stop receiving rent for the retail space.

Renting out retail spaces doesn't necessarily happen quickly. When you receive a notice, you should react by listing your store for rent promptly. However, it's crucial not to rush and rent your space to the first available tenant. Familiarize yourself with the market, so you know what type of tenant to look for and the price you can expect for your shop location.

Many commercial landlords wait too long to start the renting process, costing them money since they end up with vacant retail spaces that don't bring in monthly rent. Shops for rent are rented out every day, so with the right approach, it's easy and quick to rent out your retail space.

2: Describe your shop for rent

Start by writing a clear description of the store for rent that you want to rent out. Detail the size of the space, the price, the condition, the deposit amount, etc. Frame the description positively. If, for instance, you have a small shop for rent, present it in a positive light. Many smaller businesses are specifically looking for compact spaces that they know they can fully utilize with their products and inventory.

It's also crucial to describe the allowed uses for your store for rent. For instance, can it be used for food items like a pizzeria, fish shop, butcher, etc.?

Also, consider the services and facilities you can offer. Are there meeting facilities, conference rooms, a cafeteria, parking, or other features that may interest tenants? Offering unique amenities that businesses can't find elsewhere can be a significant advantage.

Moreover, ensure your retail space looks attractive and inviting. Tenants prefer well-maintained, inviting retail spaces.

Stay informed about market standards to avoid overpricing. On Companyspace.com, you can always see the going rates for similar retail spaces. E.g., shop for rent in Europe, shop for rent in Denmark, shop for rent in Sweden, shop for rent in Norway, shop for rent in the Netherlands, and shop for rent in Germany etc.

3: Identify your target tenant group 

After analyzing and describing your retail lease and its benefits, think about the kind of businesses that would benefit from renting your shop location. Which industries are best suited for your shop for rent? Which sizes of companies will benefit from your facilities? And which services would they value?

As a landlord, your income comes from long-term rentals. Short-term rentals are costly. The better you are at creating a profile of your ideal tenant, the higher the chances of finding the right tenant who stays and pays consistent rent for many years.

To make substantial earnings as a landlord, you need a tenant for many years. That means finding the right fit, a successful company suited for the retail space. Your ideal tenant should consistently pay rent for at least 5 years, if not much longer.

4: Create a sales listing for your store for rent 

Now, prepare a sales listing. The aim is to provide an overview of the rental space geared towards the potential tenants you want.

This listing should include data about the area, location, type, price, annual costs, and other relevant details.

Ideally, the listing should also contain a comprehensive description and photos.

5: Consider using a commercial broker 

Most property companies and private landlords handle the renting out of their retail spaces themselves, as the process is relatively straightforward. However, there's the option to use a commercial broker specializing in retail space renting.

A commercial broker can assist you with:

  • Creating a sales listing and valuation
  • Finding potential tenants
  • Drafting a lease agreement
  • Handling all interactions with the tenant and offering advice on the optimal tenant
  • Ensuring the retail space gets rented out

Using a commercial broker can be beneficial due to their broader network, potentially finding more prospective tenants. They handle all communications with the tenants and showcase the rental space. A commercial broker typically charges a fee of 10-120% of the first year's rent.

6: Promote your vacant retail spaces 

Now you're ready to start promoting your retail spaces. Here's the recommended process:

Advertise your vacant retail spaces for rent on Companyspace.com 

It's essential to create a compelling ad that clearly and precisely describes your retail spaces and your contact details. Remember to take some good photos of your retail spaces so that renters can see what they are renting.

You should then post your ad directly on Companyspace.com, which is Europe's largest portal and search engine for vacant retail spaces. Companyspace.com is used by almost all businesses looking for new premises. By advertising your shops for rent on Companyspace.com, you expose your retail spaces to a large segment of companies looking for spaces at any given time.

Reach out directly to businesses searching for retail spaces 

You can also contact businesses directly that are in search of new retail spaces. Many of these businesses list their preferences on Companyspace.com. Search directly in the directory for renters and contact businesses looking for spaces similar to yours, inviting them for a viewing.

Use your network to find a tenant 

Many companies find their new premises through networks and personal contacts. So if you know someone searching for new spaces, reach out to them and tell them about your vacant retail spaces. Perhaps you can strike a deal.

Use social media 

Social media offers a great opportunity to reach many potential tenants simultaneously. Create an ad on Facebook or other social media platforms to showcase your retail spaces. Companyspace.com has established and runs several free space-rental groups on Facebook, which you can join for free. By posting your spaces there, you expose them for free to thousands of potential tenants.

7: Show your shops for rent

Interest from potential renters will start pouring in. Every time you showcase your retail spaces, have a mental list of questions to determine if the prospective tenant viewing the space is the right fit for your retail space. Allow the tenants time to look around and ask questions. Also, be open to price negotiations and accommodating the potential tenants' preferences regarding layout, terms, etc.

8: Vet the tenant 

Once you've identified a tenant you think is suitable, it's crucial to vet them. Most importantly, investigate the tenant's financial situation. You can easily access the tenant's financial statements through public databases. You can also check the tenant's relationship with its customers on platforms like Trustpilot. Trust your gut feeling, as renting out to the wrong tenant can be costly.

9: Sign the lease contract 

After vetting the tenant and ensuring everything is in order, it's time to sign the lease contract. Ensure the contract is reviewed by a lawyer so you know it's legally sound. The lease should include details about rent, deposit, contract period, intended use, expected costs, maintenance, and subletting. Never download a contract template from the internet. Always consult with someone legally proficient before finalizing a lease agreement.

10: Maintain contact with the tenant 

Just because you've signed a lease with a tenant doesn't mean you should lose sight of your retail spaces. Keep an eye on how they're maintained, whether there's any damage, and if the tenant treats your property fairly and adequately. It's also crucial to maintain good contact with your tenant to ensure their continued satisfaction. This way, you ensure a steady flow of rental income for an extended period.

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