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Find the Right Tenant for your Commercial Property for Rent

Many businesses had lost revenue, and could not pay the commercial rent to the landlord on time. Many landlords do not know what to do next to minimize their rental losses for their commercial property for rent. 

Methods to Minimize Rental Losses

Working with the Tenant

One approach is to work with the tenant to reduce the rent. However, it’s crucial to understand the tenant’s business model and their recovery steps. At EndureGo Tax, we can assist your tenant in turning their business around, ensuring they can generate enough profit to pay the rent.

Considering Legal Action

Another option is to consult a litigation lawyer to sue the tenant for unpaid rent. As experienced accountants and tax agents in Inner West Sydney Ashfield and Adelaide, we do not recommend this step without first considering other methods. Legal action is costly, time-consuming, and may not always be recoverable. Additionally, legal costs might not be deductible expenses.

Evicting the Tenant

A third option is to evict the tenant and leave the property vacant. We caution against this method. Leaving your property vacant can signal to the market that your property is unwanted. If vacant for too long, it could negatively affect the perception of the property. Moreover, holding costs for a vacant property are not deductible due to the absence of income-producing activities.

Choosing the Right Tenant

Many landlords aim to rent their commercial properties at the highest possible price. However, is this the best way to maximize the value of your commercial rental property?

Differences Between Residential and Commercial Property Rent

Residential rental properties generally have a steady demand since people need a place to live. Negotiations can resolve minor issues regarding rental prices. For residential rent, tenants typically pay on time to avoid losing their homes.

In contrast, tenants rent commercial properties to run businesses, and they will continue renting only if the business is profitable. Landlords who prioritize the highest rental price may face problems if the tenant’s business model is not sound. Changes in market conditions, like COVID-19, can cause businesses to fail. If the landlord has not identified these risks, the impact on the business’s net profit can be significant.

Tenant Screening Services at EndureGo Tax

At EndureGo Tax, we offer a specialist tenant screening package for landlords. We collaborate with your chosen agents and interview potential tenants. Our preliminary risk analysis includes:

  • Evaluating the tenant’s business model and its viability
  • Assessing the tenant’s business experience and reasons for leaving their previous rental place
  • Reviewing their financial statements and providing an opinion and report
  • Conducting a risk analysis to determine operational and financial risks and identifying mitigation strategies

If you are interested in our Tenant Risk Review Service, please contact us at hello@endurego.com or call 0410829900.