For commercial property landlords looking to rent their unit, ensuring that they have tenants is critical. Finding them, however, cannot always be so straightforward! Landlords face the challenge of finding good tenants who are paying the best rental rate, whilst trying to spend as little as possible to find them, and here at Boxpod, we fully understand these challenges. There are two main avenues to finding new tenants – either listing the commercial property yourself or using an agent who will find them for you.
Different options suit different people, and in this article, we will take a look at the different processes of finding new commercial tenants for landlords in the UK, including listing the property yourself and going through an agent. We will then take you through a worked example of how one of our customers here at Boxpod successfully found their tenants and how much they managed to save, compared to using an agency.
What is the Best Way to Find Commercial Tenants?
Whether you have recently acquired a commercial property or have had tenants vacate one, it is important for landlords to be able to find new tenants in the way that works for them. Here at Boxpod, we understand that there are a number of criteria for finding the right commercial tenants, and each commercial landlord has their priorities. According to these priorities, different options are available.
Some commercial landlords might be looking at the most cost-effective way to find tenants, whereas others might not have the time (or inclination) to be so involved in the process. Some would prioritise time, some might prioritise getting a certain kind of tenant, whilst others might be more flexible, or some might be looking for tenants on a very long-term lease, whereas others might want short-term tenants, for example.
As we discussed in our previous article, Your Options for Finding Tenants for your Commercial Unit, there are several ‘DIY’ options for finding new commercial tenants, including word of mouth and the use of social media. For most commercial landlords, however, the main options are either through listing on a website such as with us here at Boxpod, or through an agency – either on the high street or online.
Should I List my Commercial Property with an Agency?
Many commercial landlords only really consider using an agency to advertise their commercial properties to potential tenants, as this is the most ‘traditional’ method. There are a number of pros for a landlord to use an agency to list their commercial property. These include:
- Having someone to take the legwork away from you as a landlord
- Agencies are a popular place for tenants to look when they are searching for a new commercial property
- The ability to display the commercial unit in local agency windows
- Conducting viewings with potential tenants
- Vetting services
- Standard lease services, including negotiations
- Property management services
It is important to remember, however, that all agencies differ, and differ in the services that they offer – as well as the price and quality of the service that they provide.
For commercial property landlords, there are, however, some downfalls to using an agency.
The agency acts as a representative for the commercial property (or the landlord). This means that if they are excellent communicators who turn up on time, all will be fine, but on the other hand, if they turn up late and do not return telephone calls, it can reflect badly on the property (or the landlord’s reputation). We advise that if you will be using an agency to advertise your commercial property, you thoroughly check their local reputation.
Agencies will normally charge higher amounts for their services, whether that is just the initial procurement of tenants, or the ongoing management of the property. Of course, commercial landlords do have the choice of what kind of services they decide to use.
Some of the services that can be provided by agencies include tenant vetting services, reference checking, and lease negotiation and drafting. Agencies would normally charge a basic level of between 4% – 15% + VAT of the annual rent for services of just finding commercial tenants. This amount can often vary according to the location of the commercial unit and the type of property.
Some agencies will then go on to offer management services, which would include aspects such as rent collection, the organisation of repairs and maintenance, inspections, and even rent guarantees. Of course, the fees for these services go up according to the amount of work that the agency is doing. The average percentage of agency fees can be as high as 22% + VAT for these services.
For landlords that are considering letting their commercial property through an agent, it is essential that you check thoroughly what services are included in the price that you are paying. With this information, you can go on to check that you are getting the best value for money, as well as decide if there are any other services that you would like them to take care of for you.
Which Commercial Landlords Would be Suited to an Agency?
The commercial landlord that would typically be better suited to using a lettings agency to rent their property would be:
- Wanting a more “hands-off” approach
- Looking for someone who can take care of the process
- Wishing to pay the necessary money for management services over the entire lease
- Looking for a particular rent guarantee
Should I List my Commercial Property Myself?
The other main option that commercial property landlords have to find their tenants is to list the unit themselves through websites such as Boxpod. This method is becoming increasingly popular, having only really become an option since the rise of the internet and online listing opportunities.
Some of the pros to listing your commercial property online include:
- It is possible to tap into niche markets
- 24/7 advertising when tenants and landlords can connect at any time of the day, on any day of the week
- All under the control of the landlord
- No waiting for communication from agents
- Potential for group listing discounts
- Less expensive
Normally, when a commercial property landlord lists their property themselves on a platform such as Boxpod, the only service that is paid for is the matching with tenants. This means that generally speaking, the landlord would carry out the other duties such as communication with the potential tenants, rent negotiation, vetting, and checking references, giving them complete control over who they have as tenants and the terms of the lease (including its length).
Although this does give landlords a great deal of freedom, it is worth remembering that they still need to remain competitive with other landlords in the property type and location.
Property listing websites such as us here at Boxpod will often have promotions, packages, and deals, especially for landlords who are looking to list several properties, meaning that even greater savings can potentially be made. We offer listings with a flexible subscription of just £12 a month for landlords, and commercial properties will go live as soon as they are submitted to us.
Which Commercial Landlords Would be Suited to Listing the Property Themselves?
The commercial property landlord most suited to listing their property themselves would:
- Be looking for more control over the listing and management of their property
- Have an understanding of what is required to attract and communicate with tenants and potential tenants
- Want to spend less money on fees
- Have time to carry out vetting and reference checks on the property
- Have a single or multiple commercial properties to let
Case Study
The decision of the best way to find tenants for a commercial property really depends on the landlord. However, there are many scenarios that we regularly see here at Boxpod.
One of our customers is James Kotak from Oadby, just outside Leicester. He found that agents were looking for 10% commission for finding new tenants for his commercial property. By listing his property with us at Boxpod, he paid an annual subscription of £120 and saved himself £40,000 in his first year. He also saved time, as he could deal directly with the tenant and did not have to go through a middleman, which is the case with agencies.
Final Thoughts
Of course, every landlord has their own priorities when it comes to finding tenants for their commercial property, and some are better using an agent, whereas others would prefer to list the unit themselves.
Here at Boxpod, we make the self-listing process easy, quick, and low-cost. So, if you have a retail unit, office, warehouse, workshop, or storage unit to rent, why not check how to list your commercial property with us here for as little as £12 a month?
Commercial tenants also love renting their commercial property through us. They enjoy being able to speak directly to the landlord, and like the fact that the process is quick and easy. If you are a business looking for a commercial property to rent, take a look at our range of listed properties today!
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