Tenant Screening Critical for Commercial Properties

By E-Renter Tenant Screening
Posted on October 2, 2008 under Tenant Screening & Background Checks | Be the First to Comment

Commercial property owners and managers need to do more than just collect deposits and negotiate leases when it comes to filling vacancies in their properties.  Managing commercial property includes screening tenants for likelihood of business failure.

According to Bureau of Census information produced for the Office of Advocacy of the U.S. Small Business Administration, new businesses of all size fail at about the same rate. There are differences within different sectors, but the averages are that

• after one year, about 25 percent of businesses have failed
• 36 percent at the end of year two
• 44 percent have closed their doors by the third year

It doesn’t take a lot of fancy math, or a degree in business or law, to understand that even with a signed lease and deposits in hand, commercial property owners can sustain substantial losses when new businesses fail.

Good tenant screening can substantially reduce that risk.