Running a background check on potential commercial tenants is essential to ensure you’re placing the right people in your property.
Whether you’re renting out retail storefronts, office space, or something more industrial, you need to know who will be running a business out of your property. Put together a commercial tenant screening process that identifies renters with a reliable history of making rental payments and maintaining their property.
Make sure you’re looking at the information that doesn’t come back on a basic credit report. Have they been in business long? Are they downsizing to a smaller space? Are they opening a new location? These are important parts of your tenant screening process.
Rigorous Tenant Screening Reduces Risk
When you’re taking a careful look at the potential tenants who will be renting space from you, you’re hoping to:
- Avoid criminals and people with a history of criminal convictions.
- Avoid businesses and business owners with bad credit.
- Select renters who have a positive payment history and solid financials that prove they can pay rent.
If you don’t screen tenants well, you’re putting yourself and your property at risk. Rent payments may not be made on time. This can lead to an exhausting and frustrating collection process. At the very worst, you may find yourself having to evict a tenant and while that’s certainly possible, it takes a lot of time and requires a lot of money and legal support. You’re in a much stronger position when you weed out the unqualified tenants before they move in.
A Consistent Screening Process Prevents Easy Mistakes
Everybody likes to trust their gut instinct. And, you may get a great feeling about a potential tenant who wants to rent some space to you.
Even if your personal opinions and gut instincts work out for you most of the time, you want to make a big decision like this with the help of real facts and actual data. You’re handing over the keys to an incredibly valuable piece of property, and you don’t want just anyone in there.
When you have a consistent process in place, you’re less likely to choose the wrong tenant because you’re using and trusting the systems that have been set up to identify the best possible candidates for your commercial property.
When you’re screening your commercial tenants, look for financial stability and a history of paying their bills. Check public records for things like bankruptcies, foreclosures, and liens or judgments that might be held against the business. Explore national criminal databases and look at business credit limits, tax filings, and collections activity.
Screening takes time and requires resources. If you don’t think you have a reliable screening process in place, look for some professional support. We can help you find a well-qualified and safe tenant for your commercial property. Please don’t hesitate to contact us at Preston-Lee Management Company. We’ve been providing property management services in the High Desert for more than 20 years, and we’re happy to be your best resource.
