.jpg)
Do you know what it takes to properly screen a commercial applicant? Landlords in Frisco, Texas, should always screen tenants before allowing them to conduct business on their property.
Tenant screening can mitigate risks, protect your cash flow, and keep you compliant as a landlord when done right. These best practices will help you identify how reliable a commercial applicant is:
Pre-Screen Applicants
Prospective commercial tenants should fill out an application when they are interested in the property. Create an application that asks for key information about the tenant and their business, such as:
- Business name
- Business type
- Years in operation
- Financial data
- Past references
Using the filled-out application, you can pre-screen tenants. Decide if the business is the right fit for your investment property. If tenants don't meet your criteria, you don't have to go any further in the tenant screening process.
Run a Credit Check
Commercial real estate can be profitable with the right tenants. Running a business credit check will help you determine if a business owner can pay their rent on time.
Another way to determine if they can pay their bills on time is by reviewing financial data. Review income and expense statements and see if they have a healthy cash flow.
A credit check provides you with information on the reliability and financial health of a business. Before you can legally run a credit check in Frisco, Texas, you must ask permission from the applicant.
Startups and small businesses may have little to no credit history. You can ask for a personal guarantee if you decide to accept them as tenants.
Ask for a Business Plan
As a commercial landlord, you should understand a prospective renter's business. Ask for an applicant's business plan to learn more about their:
- Products or services
- Target market
- Growth projections
This is an important step in the tenant screening process if you want to ensure a business continues paying rent. Their ideas for the future will tell you if they have a plan to sustain profits over time.
Check References
If you asked for references in your commercial property application, now is the time to check them. You can ask for references like past landlords, customers, business partners, etc.
Contact any references to get a full view of the potential tenant's reputation and reliability.
Insights into the applicant are valuable. This step in tenant screening will help landlords determine if a tenant is going to be responsible.
Tenant Screening Best Practices to Follow
Tenant screening is a way to mitigate your risk as a commercial landlord. To find reliable tenants, implement these best practices.
For help in the process, work with a property management team in Frisco, Texas. PMI North Texas is a full-service real estate asset management company offering professional property management services.
With over 30 years of experience in the Dallas and North Texas markets, we know what it takes to find quality tenants. Let us handle your screening process and more. Contact us now to get started.
