How to reduce vacant tenancy periods in commercial property

How to reduce vacant tenancy periods in your commercial property

There are many reasons that you might wish to avoid vacant tenancy periods in your commercial property – loss of rental income is probably at the top of that list. But there can be more to worry about than simply losing money. We look at some of the risks and how you can avoid them.

The problems of vacant premises

Aside from the money that an empty property isn’t earning, there are also the risks of vandalism to the premises and squatters moving in. Finding an insurance policy when a property is vacant can also be problematic. Empty properties also contribute to the perceived deterioration of an area, particularly in a high-street setting, which may lead to a more permanent situation in which the property is either let at a reduced rent or is vacant permanently.

How does it affect commercial landlords?

Commercial landlords with empty properties also face a double hit financially – not only is there no rent coming in but they are also liable to pay the full amount of business rates on properties which have been empty for over three months (non-industrial premises) or six months for industrial premises.

What actions can a landlord take to prevent vacant periods?

If you’re having difficulty letting your commercial property, there are some tactics you can adopt:

• You can consider offering prospective tenants a more flexible lease or reduce the rent to entice them to begin their tenancy
• If your premises is large enough, you could think about splitting it into smaller units
• Ask your local council about the possibility of applying for a change of use for the premises which may attract more potential tenants
• Ensure that the rent you’re proposing to charge is competitive
• Present the property to its best advantage – clean, dry, secure premises will be more of a draw to tenants than those which require high levels of investment at the outset of a lease
• For residential properties you could consider short-term rentals or even becoming an Airbnb host
• Rent your commercial property to a charity – not only will they gain a premises but they will also benefit from 80% business rates relief
• If your premises are suitable, rent them to a Community Amateur Sports Club. They will also gain from 80% business rates relief
• Occupy the premises yourself – use it to conduct business or simply for storage for at least six weeks and you’ll be able to claim a business rate rebate from the council

Of course the real secret to avoiding periods of vacant tenancy is to plan astutely in the run up to the end of a current tenant’s lease to avoid a lengthy and costly period of vacancy.

How to Make Empty Rental Properties Secure

To protect yourself financially in the eventuality your property becomes empty, there are some things you can do:

• Where possible, remove any electrical and copper pipes along with radiators, as theft of or damage to these are among the fastest-growing insurance claims
• Remove anything valuable, such as electronics, which could be enticing to thieves or squatters
• Carry out a risk-assessment to identify points of entry, and put in place appropriate measures to secure them
• Ensure you have a working CCTV and alarm/security system in place in your property, so that in the event it is vacant even for a short space of time, you are quickly alerted to any intruders
• Turn off the water supply to eliminate the risk of pipes bursting and causing costly damage

If you would like to learn more about how to take the necessary measures to protect your empty property, including remote zone vacant property monitoring, contact one of our insurance experts today.