Trying to successfully market your property on your own for sale or for lease? In just seven basic concepts, you can become aware of some of the essential steps to take as a property owner.
1. Getting the Price Right
Determining a realistic asking price is critical when selling a property. You will need to prepare a proforma that shows actual income and expenses, net income and a cap rate. You will need to have knowledge of what capitalization rates have been on properties like yours that have sold recently so you can price your property accordingly. Sellers sometimes have unrealistic expectations of what their property is worth or they fear they may leave money on the table so they end up setting the asking price too high. An unrealistic asking price will only send a signal to the market that you are unmotivated and unrealistic. By doing this, you run the risk of alienating the most qualified buyers. It pays to do your homework and price your property realistically and fairly.
2. See What Others Are Asking
If you are offering a property for lease, you need to do a rental survey and determine what the market rents are in the vicinity of your property. You will want to find out what the asking rents are on spaces similar to what you have that are in the same market area. You will also want to learn if there are any incentives for free rent or tenant improvement allowances that other landlords are offering. Also, important factors such as lease type (gross, net, modified gross, full service), lease term and personal guaranty requirements will all factor into a tenants decision on what space they choose. You need to know what your competition is doing to make sure your asking rent is competitive.
3. How Does it Look?
Write a brief description of your property and include pertinent information that you think a buyer or tenant would want to know. What makes your property unique? What are the features that make your property better than others a tenant or buyer may be considering? Highlight as many positive aspects of your property as possible. Make sure to include information about the area in which you are located so a tenant or buyer from out of the area can understand what your market area has to offer.
4. Get the Picture
A professional marketing brochure will send a message to the market that you are serious about marketing your property. The brochure needs to be well thought out, thorough yet concise and promotional. It needs to tell the story of your property and get your prospects excited and interested in learning more. A good brochure should include the following:
- High quality photos
- Location Map
- Site plan (if available)
- Proforma (when selling)
- Pricing and asking rents
- Demographic information
- Your contact information
5. Online Presence
There are several online services you may want to consider to market your property. LoopNet (www.loopnet.com) is the most widely used site for commercial real estate and it has a simple, form-based interface to upload property information. You don’t need to be a member to post a listing but if you opt for their free listing it will only be visible to paying members. A LoopNet listing also gains you exposure on several sister sites they have like City Feet (www.cityfeet.com). CoStar (www.costar.com) is another well-known site and putting your listing here is free. Depending on they type of listing and the size of the availability you can also consider Craigslist (www.craigslist.com). Surprisingly, Craigslist can be useful for small investment properties and small spaces available for lease and it is a free service.
Include as many pictures as possible and upload your brochure. Loopnet provides a map and demographic reports for your property. You could include a summary of the demographic information in your brochure to show population and household income for 1, 3 and 5 mile radii from your property.
6. Make Your Mark
For certain kinds of listings the sign can be the most effective form of marketing. Investors and prospective tenants often decide on a general area first and then drive the market to see what is available. Having a visible, professional sign can dramatically enhance your chances.
Here are some key things to remember when creating your sign.
- It should be at least four feet tall by four feet wide. If you have room or if it is a vacant land you should consider a sign that is four feet tall by eight feet wide.
- Keep the sign simple – the most important information on the sign is the phone number. The words “FOR SALE” or “FOR LEASE” should also be immediately visible. Don’t bother including too many details on the sign – it will just make it too busy and confusing and make it harder for someone to see your phone number when they are driving by.
- Use a professional. Spend a couple hundred dollars and have a professional sign made and installed. It will be worth the money and they will be able to install the sign safely while ensuring there are no utility or phone lines underground before they dig.
- If your property has a name or a logo you should use it on the sign – it will help make it look more professional.
7. Deal or No Deal
Once you have someone interested and ready to make an offer you might want to consider using a letter of intent (LOI). This is a non-binding document that is a representation of the business terms that both sides agree to before they enter into a legally binding lease or purchase and sale contract. In the LOI you would expect to have terms like sales price, due diligence timeframe, closing date, deposit, etc. in a sales transaction. In a lease deal the LOI would contain the lease rate, lease commencement dates, rent commencement dates, tenant improvement allowance, tenant’s intended use clause, etc.
Once you have an agreed to LOI we highly recommend you hire an attorney to prepare the lease or contract. You need to make sure your interests are protected and realize that in commercial real estate there is no such thing as a standard sales contract or lease. Commercial transactions are often complex and a qualified real estate attorney can help you navigate through the issues and help ensure a successful closing.
*Keep in mind that often the first offer you receive ends up being the best. Set realistic goals up front. If you can meet those goals or come close, jump at the chance and don’t second guess yourself.