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Interested in learning more about commercial real estate? Check out the blog postings below.


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10 Tips – Renting to Tenants

1. Credit Check: Obtain a legal consent from the prospective tenant and run a credit check before you accept a tenant through an approved credit agency or through your bank.

2. Bank, Previous Landlord & Other References:  Obtain banking information and consent for a bank reference check from the prospective tenant and follow through with all reference checks. Check with previous landlords, and creditors that the prospective tenant may do business with.

3. Lease Document: It is best to engage a lawyer to prepare a lease form which contains specific provisions which relate to your property and the relationship that you are looking to establish with your tenant. It may seem expensive but it may be money well spent in the long run. Standard Lease forms may be cheap to acquire but very costly if key ingredients are missing that may be applicable to your situation will definitely be costly in the long run.

4. Illegal Apartments & Code Violations: Never rent out an illegally converted apartment. You will be exposed to many potential problems. If a tenant or guest of a tenant has an accident, you will have exposure. Legal collection of amounts due may be invalidated by a judge if it is determined that the unit is illegal. Ensure that you are up to current codes at all times, as non-compliance equals exposure to possible liability.

5. Residential Tenancies Act 2006: Become familiar with all legislation which will affect your property and relationship with your tenant. The Act addresses issues such as default provisions, how to terminate tenancies, violations and other matters which should be aware of.

6. Register Yourself as a Landlord: You should always register as a Landlord with the municipality and various governmental agencies which have local jurisdiction.  In the event a violation is issued or should a tenant or neighbour voice a complaint you would likely be contacted immediately and directly.  This may speed up the process and you may be given ample lead time in order to fix the problem and avoid unnecessary penalties and interest. Many municipalities have other requirements and failure to comply will likely result in steep fines.

7. Vacant Possession: If you are contemplating selling your house, remove your tenants before signing the contract of sale, as there is no assurance they will leave voluntarily which may delay your closing and cost you much more than previously anticipated.

8. Rules & Regulations: Having a comprehensive and current set of Rules and Regulations will make your building more desirable and will afford you more control over your property and the enforcement will be appreciated by your tenants. Items that are typically addressed within these rules would be parking, garbage and recycling matters, pest control, leaving goods outside units, bicycle storage, and other matters.

9. Type of Tenants: Make decisions regarding the profile of tenant that is suitable for your building. Singles, retirees, large families, pets, all affect the leas ability of your property and hence its value.

10. Record-Keeping: Maintain a good set of records which are clear and concise with proper back up. This applies to rental collections, invoices, payments. The records will be invaluable in the event your property and company may be subject to an audit, in the time of a sale and for other reasons.

10 Tips – Commercial Real Estate Negotiation

  1. Know the property you are looking to buy or sell better than anyone else
  2. Know what other comparable are currently available
  3. Know what else has sold in the area that is comparable to the property
  4. Understand the motivation of the seller is selling or the buy is buying
  5. Know what is the most and least you are willing to pay before you walk into negotiations and what other concessions you expect and are willing to make
  6. Always be mentally prepared to walk away
  7. Use time to your advantage so make sure you have lots of it
  8. Success is in the Detail, so dot your i’s and cross your t’s
  9. Check your ego and emotions at the door and stay focused on your goals
  10. Refer back to 1

10 Tips – Leasing Office Space

  1. Location: factors such as transit, amenities, access to employment …
  2. Barrie-Free accessibility, elevators, ramps, caters to those with persons with disabilities, visual, etc.
  3. Style of building – image projection.
  4. Design – floor sizes,
  5. Financial formula – rents, TMI’s
  6. Flexibility – expansion options
  7. Quality of Landlord
  8. Built-In Technology
  9. Green Amenities
  10. Other tenants within the complex and the benefits or negatives as a result of being within the same complex as them.

10 Tips – Retail Site Locations

  1. Look at Demographics reports that are most current to determine the most suitable area to sell your products or services.  Being close to large high density residential area with a lot of walk by traffic can be a strong indicator of a vibrant and successful retail area.
  2. Don’t just choose the lowest rental rate area to open your business you have been dreaming about for years and years.  Find the area that is either smack dab in the middle of the most trendy Neighborhood or get the are that is on the cutting edge of becoming a hot shopping area. Rule of thumb for the leasing industry is that rents higher than $25psf net are prime retail areas.  Aim to find a price you are comfortable paying and can sustain for at least a year from your own savings.  Remember you get what you pay for.
  3. Location near Starbucks, Banks, Liquor and Grocery stores are always good to be located in a plaza or nearby. Every business has a ideal location to be situated. Look at where your competition is located and understand why they are located where they are.  Is it a office area with busy lunchtime business?  Is there a MTO licensing office nearby that brings a lot of drive by business constantly.
  4. Subway and transportation nearby.  Access for customers and staff is important to everyone.  Get yourself in the centre of radius from where you want your customers to travel in from.
  5. Signage and being visible from the street is your best advertising. Look for areas that signage can be installed. Check with City by-laws to verify signs are allowed.  Usually landlords will want to review the signage that you will want to put up first. Make sure the landlord agrees to allow you light or unlighted signage in your Offer to Lease agreement.
  6. Traffic generators as with Location mentioned above are the most important customer draws for walk by business.  Check the area for parking and other positives that make it easy to bring business by your location without you having to spend oodles of money on advertising in your infancy stages years 1-2.
  7. Selecting a commercial real estate broker to represent you is the most important detail that you are going to need to facilitate this important decision.  You wouldn’t take medication without first checking with a doctor right? Well getting a Real Estate agent first of all if free for almost 99% of the time. The Landlord pays his fees.  The Leasing representative will negotiate you the best deal and help you with explanations to some of the complicated deal making pointers most people are not familiar with such as asking for Landlord work and getting free rent during the construction period.
  8. Once you have selected the Real Estate agent that knows the area well that you want to be located in. 1. Tell him what intersections you want to be near. Example between Yonge Street and King St West and west to University and east to Church Street.  2. Give the leasing representative a price range you are comfortable paying per month.  He or she will tell you if that is realistic or whether you need to expect to pay more for that area.  3. If possible have a business summary or plan ready that you can send the Leasing Representative to review so he knows you are ready to shop around for the amazing location you are dreaming about. The most important thing to working with an agent is that you trust them and are comfortable with there timing and professionalism.
  9. When the right location is identified spend some time watching the store from across the street. Count walking traffic and cars driving by.  The Toronto Real Estate Board offers a traffic count map that can provide very current traffic counts to help you with your choice of location.  Speak to local tenants about business and learn who the local BIA group is. They can inform you about the area and sometimes give you a approximate rate that most tenants are paying according to new leases signed by members in the last 6 months.
  10. A commercial real estate lawyer is the next person you want to help you once the Draft offer has been prepared.  Ask for exclusivity for your business since the landlord may own neighboring properties and could put you out of business if he allows another tenant to compete against you.