5 Ways Tenants Can Negotiate Cheaper Rent
Check out these 5 practical steps you can take to prove you’re low risk and negotiate cheaper rent.
Landlords are pretty simple creatures. All they really want are low risk tenants who pay rent on time and drive traffic to the shopping center. Here at Foresite, in addition to representing up and coming tenants, we manage shopping centers and help landlords evaluate tenant risk. And, generally speaking, the lower the risk, the lower the rent a landlord is willing to offer. Check out these 5 practical steps you can take to prove you’re low risk and negotiate cheaper rent.
1. Demonstrate Your Experience
The easiest way to show a landlord that your business will bring value to their property is by showing them a successful track record. Providing sales numbers and profits can verify that you know how to run a business. Giving them access to your financials builds immediate trust and helps take away their fear of not having a paying tenant.
Bonus tip: If you’re a restaurant owner, send your menu. Experienced restaurateurs know that a concise menu cuts down on food waste and improves profitability. And guess what? Landlords love profitable businesses!
But what if you’re a brand new business or renting a brick and mortar space for the first time?
2. Show Off Your Social Media
First time business owners or startups looking for a physical location can put landlords at ease by letting the community do the talking for them. A significant social media following offers proof-of-concept and also shows that you know how to market your business. A great example is our tenant Jacked! Potato.
Owner Jacci Castille started selling her homemade baked potato out of the trunk of her car. The concept was a hit and she was ready to move operations into a brick and mortar space. The loyal following she had built on Facebook and Instagram gave our landlord confidence that Jacci could succeed.
3. Submit Your Resume
No, you’re not applying for a job but this isn’t your typical resume. It’s time to brag about yourself a little. A short paragraph listing your accomplishments, awards and certifications can go a long way in convincing even the most cynical landlord you’ve got the credentials for success. And there’s still something about a handwritten note that adds that personal touch of persuasion.
Now that you’ve established to the landlord that your business is not a vacancy risk, consider negotiating a couple of items in your lease that might help put them at ease.
4. Sign a Personal Guarantee
Nothing helps to relieve a landlord’s stress like a tenant who’s willing to put some skin in the game. Most personal guarantees are secured, which means you’ll put up some assets (like a car or property) that can be sold or used to pay the lease. Signing a personal guarantee lets them know you’re prepared to assume some of the risk associated with the success of your business. This tactic can also be helpful in negotiations where you might be competing with other tenants.
5. Pay for Your Finish Out
Most retail lease spaces will need some sort of improvements made before you can open for business. And most tenants want the landlord to share in those expenses. While most landlords are happy to negotiate a tenant improvement allowance, offering to pay a larger portion of the costs will make you a more attractive prospect.
Following these 5 steps will not only make you less risky to a landlord, they can also help you negotiate cheaper rent. Remember, the landlord is looking for the best tenant that adds value to their investment. Make them an offer they can’t refuse.