Buying, selling or renting a commercial property takes a lot more patience and acumen than dealing in residential property. While you’re usually clear on what you want in a house, you could be doing a lot of guesswork when it comes to a business – especially if you haven’t started running it yet. You’ll want some good help, so here’s how to recognise and pick the better agents in this field:
Look up the property agent’s previous work
Say the property agent has previously helped someone buy, or rent, a location for a retail store. It would be a good idea to visit this place, to get a sense of how good the property agent’s recommendations are. If you see a store that’s booming and full of foot traffic, then the agent either knows what he or she is doing, or has access to some prime locations.
If the property agent has helped to sell a lot of properties, then check out the prices of commercial property in those areas (you can use the 99.co map for this). What prices did the property agent manage to fetch, and how does it stack up against the neighbouring units? A good property agent should be able to match, or even go above, the median prices in the area.
Look for a property agent that has a relevant speciality
Commercial properties can be worlds apart from each other. A hotel space has a very different function from a retail space, or a manufacturing space. For this reason, it’s best to pick a property agent who specialises in your type of commercial property.
Agents who are specialised tend to have better networks or buyers, sellers, or prospective tenants. They would also know of common tricks to watch out for, such as tenants who just want a money-laundering front*, or tenants who are likely to break a lease (e.g. they can gauge when a tenant’s business won’t be sustainable).
If you’re selling a commercial property, a specialised property agent can speed up the process, and find you better prospects. They probably have a wider network of interested buyers, compared to more generalised agents.
*Some loansharks rent out commercial properties just to have a business address, so they can fake the source of their income.
Note if the property agent gives you regular updates, during the search
Good property agents will contact you at least once a week, to talk about viewings, potentially good buys or interested sellers, and so forth.
Don’t hesitate to drop property agents who claim to represent you, but fall silent after a few days. This could mean the agent has decided your requirements are too much trouble, and has decided to quietly ignore you in favour of easier deals.
If you’re selling your commercial property, check if the property agent is proactive in staging the property
This doesn’t just mean giving the place a quick sweep, every now and again. Good agents will take extra steps to make the property look good, such as putting in temporary track lights, plastic plants, picture frames, etc.
The better property agents may even hire a professional photographer, to take pictures for the listings.
If you visit the property and see curtain rods hanging down, or broken lightbulbs and insects on the floor, that’s a sign the agent may not be doing enough (besides, if there are regular viewings going on, the agent wouldn’t leave the property in that state).
If you’re selling your commercial property, ask about the marketing strategy
A good property agent will have a systematic plan to market the property, and may even draw out the steps on a calendar. One distinguishing trait among good agents is that their marketing often contains a twist, a unique selling point to your property type.
For example, one property agent we know started writing LinkedIn articles, about the problems faced by logistics companies in Singapore. Doesn’t seem relevant to his job does it?
But in the process, the agent received comments and emails, and identified several prospective buyers for a warehouse space. He knew from his network that most of the key decision makers were frequent LinkedIn users.
Look for property agents who have stand-out ideas like these, rather than agents who recite a laundry list of routine methods. Creative marketing is especially important for commercial properties, as it is quite niche; one cannot easily find prospective buyers by shoving flyers into mailboxes.
If buying or renting, find out how much the property agent understands about your business
Drop a few test questions, such as “do you think malls are better locations for restaurants?”. Being in the business, you may already know the answer – but what you’re looking for is a property agent who can demonstrate sufficient knowledge.
If the agent does not even understand your business, it’s hard for him or her to recognise the properties that suit your needs, or to spot problems (e.g. it may not occur to a non-restaurateur that, if they are not located in a mall, rain can be a factor in driving away customers).
The best commercial property agents can seem practically qualified to run your business themselves (and some in fact are, having come from the same industry).
Ask what happens if a deadline isn’t met
Ask the property agent what will happen if they can’t help you sell, buy, or rent by a certain date. Such deadlines are probably more important to you, than they are to a residential property seeker; a business must be up and running by a certain time.
A good agent will have a satisfactory contingency plan, such as a change of approach, or a list of back-up options. Avoid agents who cannot give you a coherent plan, for such an event.
Of course, this does also mean you should set milestones and deadlines. A good commercial property agent will never be opposed to this sort of planning; they will recognise that it’s necessary, especially for businesses that must buy or rent in time.
If you found this article useful, 99.co recommends 9 things to look for when buying or renting a shop in Singapore and when should you appoint an exclusive property agent.
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