When you’re looking for a retail property doing your research will make a huge difference to your success – whether you use a retail property consultant or not.
Look at as many properties as possible in your target area as well as competitive areas. This will let you get a good idea of the market, of the properties and their conditions and rents as well as facilities.
With your life savings on the line you need to talk to as many real estate agents as possible. Ask loads of questions and you’ll find out a heap more information than you thought would be so easily handed over.
I was talking to a local real estate agent about properties in a specific area and he gave me the rents and state of business health for each of the businesses in the area. I was scribbling down notes as fast as I could with my mind whizzing with questions that he was answering.
When you’re looking at properties take your camera along and take pictures and notes so you can compare and contrast properties later.
Find out about the facilities of the properties like parking, loading docks, access for customers (think about strollers, wheel chairs, trolleys etc), lighting, fittings and securing them, renovations, upcoming construction work in the area and the impact on the shop itself, security, shop front presentation and specifics for kitchens.
Go over just as thoroughly the storage areas and bathroom facilities associated with the shop. Some shopping malls offer a very small storage area on site while there can be larger storage areas for street shopping strips.
A friend of mine was running her bedding business out of her garage and when it was getting too big and taking over her home she found that it was wiser to get a shopfront with a large storage/warehouse area than simply get a warehouse space. Hence she ended up with a shop that she’s made very successful.
Consider also risks such as flooding and storm damage. Has the property a history of flooding, can you store goods off the floor to reduce risk? What about fire risks from old wiring and other shops in the area. Thinking through business risks and the physical locations of the shop can save you a lot of heart ache and expense.
Looking at a heap of properties can get confusing so using a system to keep it all sorted can make it much easier to compare apples with apples. Keep all notes, lease examples, conversations, documents and correspondence (print out emails) in one folder so you have it together.
Be really careful about signing leases. Get legal advice about leases because they are complex and can cost you a fortune. Get copies of leases for the properties you’re researching, whether you’re serious about the property or not because it will help you build your experience with leases.
You can get free legal advice about leases, especially if you’re part of an industry association and they have agreements with legal firms to help members, so take advantage of it to build your knowledge of leases so you have a better idea of what you’re doing.
Find out from the agent, local government and chamber of commerce what are the development plans for the area that could impact your business and how long will they go on for? I have seen shopping districts redeveloped where access to shops is so hard their sales have dropped off by 70%. This can kill a business and soak up all your life savings. It might be great after the renovations but if you’re not there to benefit from it then it is useless for you.
Remember with a lease to look for where the money is. A lease is a contractual agreement between a tenant and property owner for the specific use of the site for a set amount of time for a fee – rent. The contract is legally powerful and sets out the rights and obligations of both parties. This is the simple part.
The complexity comes with the details of the lease, especially where the money is involved. So always get advice about the terms and conditions from a professional about the lease, either a solicitor or an accountant who has lots of experience with the language and structure of leases.
Talking with other tenants who are in similar location to where you are looking at will tell you what to watch out for with leases too. Note down the conversations and keep track of what they find difficult as well as good.
Using a retail property consultant can make your experience of finding the right location and signing a good lease the best thing you ever did. Remember, the lease can make or break your business. Some people baulk at the initial cost of a consultant but compared to how much you are putting on the line the risk management cost of a consultant far outweighs the harm of losing all your savings for lack of experience.
Doing your research can give you the advantage of your competitors and bring you the success you’re planning on. Turning your life savings into financial freedom is possible in retail with the right lease.
Post time: 04-20-2017