There are over 618,000 small businesses in the state of Maryland. If you'd like to rent your commercial properties to these growing businesses, you must first screen them.
Doing this will allow you to get the most out of your commercial real estate.
Are you curious about tenant screening best practices? Keep reading to learn about them and ensure you have trustworthy occupants for your commercial rental property.
Double-Check Business Viability
For commercial tenants, it's essential to assess the viability of their business. Request a business plan and financial projections.
That way, you'll know they can sustain operations and meet lease obligations.
Comprehensive Application Forms
Start by creating detailed application forms. These forms should gather essential information about prospective tenants.
For example, you'll need their business details, financial history, and references. Make sure to ask for permission to run credit and background checks.
Screening Tenants With Credit and Background Checks
A credit check is one of the best ways to assess a tenant's financial responsibility.
Look for a long credit history and an impressive credit score. This shows whether the tenant pays bills on time and manages their finances well.
Conduct background checks to uncover any dangerous criminal history. A clean background check can act like a green flag to move forward.
Income Verification and Security Deposit
Double-check that your potential tenant has a stable source of income. You can do this by requesting income verification documents such as bank statements, tax returns, or business financials. Analyzing these documents can help you gauge their ability to pay rent consistently.
Collecting a security deposit from the tenant is another way to ensure they have funds. This provides a financial cushion in case of damages or unpaid rent.
Tenant References and Interview
Contact the tenant's previous landlords and ask about their rental history. Ask if they paid rent on time and maintained the property well. Find out if they had any lease violations.
Are you still on the fence about a potential tenant?
Schedule an interview with the potential tenant. This is an opportunity to discuss expectations and answer their questions. You'll also get a sense of their professionalism and communication skills.
Lease Agreement and Fair Housing Laws
Draft a comprehensive lease agreement outlining the lease terms and conditions. Be as clear as possible.
Ensure it includes clauses related to rent, maintenance responsibilities, and any specific rules for the commercial property.
Remember to comply with relevant laws. Many laws prohibit discrimination, for instance. Ensure your screening process is fair and unbiased.
Tenant Screening Is the Best Practice for Commercial Properties
Tenant screening is unavoidable if you want to get the most out of your commercial property. By comprehensively screening tenants, you can find a professional tenant who will stay for the long haul and not cause trouble.
PMI Potomac can help you with the screening process and other property-related tasks. From marketing to rent collecting, you can rely on our trained and experienced property team in Rockville, Maryland.
Schedule a consultation with a PMI expert soon.
