YK Hwong, Photo Credit to YK Hwong
clock 05-10-2017
hit 1,504
I Help You, You Help Me Lah!

Be the first to review


I bet you've run across this phrase in your life quite recently, "I help you, you help me lah!" Well, it is the truth for Commercial property owners, the landlords who care (when I say care it doesn't mean you go and feed their pet fish ‘Memo' when they are on vacation) are the landlords who win in the end, within certain boundaries of course. Thus, this article focuses on commercial properties. This is for the general location shop lots, not the SUPER HOT ones, as this kind of units generally has many suckers waiting to pay the landlord a deposit, like IMAGO mall etc…

All of us want high rentals for our properties, but have we ever thought about the survival of our tenants? Who cares? Well you should, they are the ones who will pave the way forward on your retirement income. Okay, let me give you a few reasons:

1. If the tenant cannot be profitable after paying you rent, how long do you think they will rent from you? It is not beneficial to keep on changing tenants for commercial properties, I will explain the reason for this further down.

2. It is relatively easy to rent out your condos or apartments or other houses because while not everyone will be running a business, everyone surely does need a house to stay in! This is common sense. The FACT that Residential properties are the bread and butter for many seasoned investors is not without reason.

3. Commercial unit tenants, renting shop lots, retail spaces and offices require economic activity and profitability to keep on giving you rent. Charge them high enough and they might just bail on you! Frequently changing tenants, only mean one thing to other potential tenants; that this is place is not WONG, not ONG, Bad Luck.

4. Have you ever noticed shop lots that are always changing tenants every couple of years? That none of them can last for more than 1 or 2 years? The tenants will try to stick it out, no matter the loss they suffer as long as they can cover the basics because they will lose more if they move out now (before the lease is over). They may have already spent a fortune doing renovations and decor, and every month they are paying really high rent. They would rather try for another month than leave the lot empty, at least until the lease is up or the tenancy expires, or worse after they fail to pay and BURN all of their deposit.

5. Frequent changing of tenants make you lose out on income, and possibly miss out on your best tenant because nobody wants to go in anymore after seeing so many fails.. (the ONG part again, say what you want but some business people are really superstitious, and I can't blame them, because sometimes you do need a bit of luck to succeed in business)

6. As commercial units take a longer time to find a suitable tenant, the loss of income is real. Commercial tenants will do a lot of studies before going in to rent your space, as it is a big investment. Most commercial property owners only supply the bare minimum and it is the tenant who will renovate, design and retrofit the place, some even spending millions for a property they don't even own! The bigger the company, the more careful they will be.

7. For steady and strong cash flow, choose a tenant that has good potential and is growing. I rented out my unit to an up and coming to Big Supermarket Chain because I believe they will keep on growing. And charge them a reasonable and fair price.

8. Some property owners live for extorting the last bit of rental they can squeeze out of the tenants. I SAY they are the MAN while I always Chicken Out, fearing to lose my BEST Tenants. I maintain a good Balance of Rental Hike and Tenant Plight.

Of course, you can charge whatever you like when you own the property but remember, while you choose the people, the people also choose you! With more and more shops and businesses coming up, it is getting harder for owners to let out their units on the market.

Technology has also changed the way that a physical storefront is used and needed. Many manufacturers now use retail lots as showrooms and showcases while doing most of their sales online rather than actual sales centres where the majority of the sales figures USED to come from. News of Jeff Bezos becoming the world's Richest man (if only for a while), who operates Amazon Online should be sending some strong signals to the retail sector. In the path to becoming the Giant that is Amazon, it has obliterated (big words) and crushed many offline retailers, many of them cannot compete with Amazon's pricing and efficiency. The lack of a storefront has become the ultimate cost-saving weapon in Amazon's hands. In the end, the need for a physical store is becoming less and less important as we head towards "the most efficient" generation.

To the property landlords: "You help me and I help you lah!"






Tell people your experience that helps others and don't forget to give your overall rating.


footer tagline