Renting Out Commercial Property – What Landlords Need to Know

Why Rent Out Commercial Property?

Renting out commercial property can be a profitable investment, providing landlords with long-term, stable rental income. Compared to residential rentals, commercial leases often have longer terms, fewer management responsibilities, and potentially higher returns.

Key Benefits of Renting Out Commercial Property:

✅ Higher Rental Yields – Commercial properties typically offer better returns compared to residential properties.
✅ Longer Lease Terms – Tenants usually sign leases of 3 to 10 years, ensuring steady income.
✅ Fewer Maintenance Responsibilities – Tenants are often responsible for repairs and upkeep.
✅ Diverse Tenant Base – Businesses, retailers, offices, and industrial tenants create strong demand.

How to Rent Out Commercial Property – Step-by-Step Guide

1. Prepare Your Property

Before listing your property for rent, ensure it is in good condition, meets safety regulations, and suits potential business tenants.

• Conduct necessary repairs and maintenance.
• Ensure the property complies with health and safety regulations.
• Consider refurbishments to increase rental value.

2. Determine the Right Rental Price

Setting a competitive rent is essential for attracting tenants while maximising your return.

• Research local commercial rental prices.
• Consider factors like location, size, amenities, and market demand.
• Work with a property consultant like Fraser Bond for accurate valuations.

3. Market Your Property to the Right Tenants

To secure reliable tenants, use multiple marketing strategies:

• List your property on commercial property portals (e.g., Rightmove, Zoopla, CoStar).
• Work with a commercial estate agent for targeted tenant searches.
• Advertise in local business directories and industry networks.

4. Screen Potential Tenants

Choosing the right tenant reduces risks of rent defaults and property damage.

• Conduct credit checks and financial assessments.
• Review the tenant’s business history and future viability.
• Obtain references from previous landlords.

5. Draft a Strong Lease Agreement

A well-structured commercial lease protects both parties and prevents disputes.

Key lease terms to include:

• Lease duration (3-10 years, with break clauses if needed).
• Rent payment terms (monthly or quarterly).
• Service charges and maintenance responsibilities.
• Business use restrictions.
• Rent reviews and renewal options.

6. Ensure Legal Compliance

Commercial leases are regulated under UK property law. Ensure:

• Energy Performance Certificates (EPCs) – The property must have a minimum EPC rating of ‘E’.
• Fire & Safety Compliance – Install necessary fire alarms and emergency exits.
• Planning Permission – Ensure the property’s use aligns with planning laws.

7. Manage Your Commercial Property Efficiently

Once rented, efficient property management ensures smooth operations and maximises returns.

• Maintain clear communication with tenants.
• Conduct regular inspections and maintenance.
• Work with a professional property management firm like Fraser Bond.

Common Challenges & How to Overcome Them

❌ Tenant Defaults on Rent – Have a strong lease agreement with rent deposit guarantees.
❌ Property Damage & Maintenance Issues – Specify tenant responsibilities in the lease.
❌ Long Vacant Periods – Price competitively and use a commercial letting agent.
❌ Legal Disputes – Work with legal professionals to ensure compliance.

How Fraser Bond Can Help

At Fraser Bond, we provide expert commercial property letting services, including:

✔ Property Valuation & Market Analysis
✔ Tenant Sourcing & Lease Negotiation
✔ Legal & Regulatory Guidance
✔ Full-Service Property Management

Conclusion

Renting out commercial property is a lucrative opportunity when managed correctly. By setting the right rent, attracting reliable tenants, and ensuring legal compliance, landlords can achieve stable, long-term rental income.

Looking to rent out your commercial property? Contact Fraser Bond today for expert guidance and tenant sourcing.