Why It’s Harder to Be a Commercial Landlord Today

Remember the game of Life where you pick your path — go to college, land on a career path and that’s your payday for the whole experience? Do you remember ever picking commercial landlord? Yeah, that one wasn’t there and here in 2021, due to many factors that path is getting decidedly more difficult.

The Pros

Income potential — real estate investors are looking for a good return and commercial buildings tend to be safer with a higher return than residential overall.

Work with tenants more professionally — Property management company Tradewinds wrote recently, ”If you own retail or office buildings, your tenants will be business owners, which will help you keep your relationships with your tenants polite and professional. Another upside is that business owners usually like to keep their rented areas in good shape, especially if they offer products or services. This can help you more easily maintain your property’s condition over the long term.”

The Cons

Larger initial investment than residential — higher startup costs are common with commercial properties.

Higher costs for required maintenance and repair — Again, expect to pay more. Being on top of property maintenance for commercial buildings can be a costly & time-consuming task, so you have to have the budget and dedication to do so.

Risk of injury — More traffic to a location increases the chance someone will get hurt or do intentional damage to the building and grounds as well. Aside from good quality insurance to protect you from such risks, you may also need to litigate injury claims or other lawsuits more often.

Chance of nuisance ADA claims — states like California and New York deal with a huge number of opportunistic plaintiffs and lawyers filing nuisance ADA claims. These must be fielded and dealt with according to the rules stated in the Americans with Disabilities Act (ADA).

You might not get paid rent — The pandemic created a lot of small businesses without the funds to pay their rent. For example, one of Dean Sperling’s clients is owed more than $300,000 in back rent and even with a personal guarantee, it doesn’t mean this landlord will get paid.

So here in 2021, it does seem like it’s more difficult than ever to be a commercial landlord. It’s not for the faint of heart so if you’re taking your little plastic car down THIS path, make sure you’re ready for all of this and quite a few disputes along the way. They’re everywhere!

And when those annoying things negatively impact you and/or your business including bankruptcies, landlord/tenant matters including unlawful detainers, contract issues, nuisance ADA claims and even collections, call in your good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind!

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