I own a small commercial building. The units are suitable for very small businesses, like small office, hair salon, etc. I recently had a bad experience with a tenant (always late with their rent payment and finally left with some rent unpaid), but to be honest, I didn't really do any sort of screening on them before they had moved in. So, I would like to know what are some ways I can screen such tenants.
I'm guessing many people will suggest looking at numbers showing how their business is performing. While I agree with this, keep in mind that most of these businesses that would look for space in that area would be small sole proprietor type business, likely serving the lower income population and doing cash transactions. Or many are just starting out. So I doubt how many of them can furnish things like income statement or other records.
Given this, what are some things I should still look for, or what are some questions I should ask them?
Thanks in advance.
Business plan, financial projections, cash reserves. Second location vs first. Lots of metrics, you just have to review everything and know what tenants fail and what is the risk.