Tenant Check - Commercial Tenant Screening

Commercial Tenants Must Be Screened Too!

Commercial tenants must not be exempt from a tenant check. Some companies hide behind an LLC and the only way to know is to complete a screening with ATS.

Let’s get straight to the point: some landlords mistakenly draw a line between residential and commercial tenants, believing that commercial tenants are less susceptible to cause problems and more reliable.

Let’s for a moment assume that this is actually true. Even if it were, tenant checks on commercial tenants are still critical. Here’s why: usually with commercial tenants there is more on the line. Commercial tenants pay more rent, use more valuable spaces, and if they are in retail that space can be more visible to the public—which may reflect on your reputation.

If a commercial tenant fails to pay rent, it may well be a bigger hit to your cash flow than the same action by a residential tenant.

Keep in mind that businesses are also different from people. Most Americans have steady jobs—they know what their income will be month after month and can easily plan to make payments on a timely basis. But businesses have widely ranging incomes depending on time of year, cyclical concerns, and how wise the business owner’s choices are. Businesses are much more prone to sudden belt tightening because, while they can forecast their incomes, they are often off the mark. The basic fact of being a business also has a layer of protection that much more than a residential tenant can shield assets.

In short, handing over the keys to your property is almost always a bigger risk with commercial tenants. Of course, being a commercial landlord can be a rewarding business. The best landlords keep asking themselves, how can I cut my risk? A tenant check has got to be one of the least expensive, least painful answers out there.