A shop is a commercial space where goods are stored and sold. A sizable shop ranges between 20’x40’ to 75’x120’. Shops are not only built in the market environment, due to their size, they can be built anywhere as long as people can find their way there to access the goods sold. Several shops are found along the roads, on the streets and in market palaces. The prices of shops vary depending on location, size, proximity to the road etc. Other factors influencing the prices of shops include facilities provided, level of finishing and environmental advantage.
Renting out shops is one of the easiest transactions when properly marketed and dealt with. 11 important factors would promote smooth sailing during shop letting transactions:
- Take proper inventory of the facilities and equipment provided in the shop and document same.
- Do market research to determine what similar shops in the neighbourhood command in terms of rents.
- Fix your rent from the findings you have made
- Advertise the shop to let and entertain as many prospects as possible
- Screen potential tenants to find out the type of business they want to do and determine whether their business can make enough to pay their subsequent rents
- Provide potential tenants with the “Know Your Client Form” to gather enough information about them.
- The KYC form should be able to help you investigate the reason why the potential tenant left his or her previous shop. If it’s rent default related, then don’t approve, other reasons can still be further scrutinized before approval.
- If you approve the application, finalize the rents, service charge and other fees then issue him or her copies of the prepared Tenancy Agreement to read and sign (including the signature of the guarantor).
- Collect rent and give out a payment receipt
- Do a joint schedule of condition (inventory) of the shop to confirm that the facilities provided are all in good condition, then make the tenant sign on the already itemized inventory.
- Hand over keys to the new tenant
You are expected to sign your section of the Agreement and give a copy to the tenant for his or her keeps.