As a billboard owner, your ultimate goal is to enjoy a long term profit from your billboard tenants. It is a big predicament to have your tenant cancel the lease prior to the termination of the contract. Chances are, you will find this situation a hassle and may possibly lead to conflicting issues that you want to avoid as much as possible. So what are the odds that your billboard tenant will cancel the lease contract? There are different factors to consider that can help you avoid a lease cancellation as a billboard owner.
Gauge the ability to pay of your tenant
Owning billboards and leasing them can be a lucrative income, especially when you successfully lease billboards with a reliable tenant who has the capacity to pay for the rent religiously. The financial status of your tenant is an important consideration when gauging the odds of cancelling the lease on your billboard. It is in your favor to conduct research regarding the financial condition of your prospective billboard tenant to avoid the potential problem of premature cancellation of the lease due to their financial condition.
Learn the billboard lease history of your tenant
It is a basic consideration that a tenant who has a history of cancelling a billboard lease in the past will likely do the same thing for your business. The record of your prospective tenants involving his or her dealings with billboard owners in the past can indicate the likelihood of cancelling the lease contract prior to reaching its full term. Make sure to understand what caused the prospective tenant to cancel the contract and gauge the possibility that the same issue might happen again when dealing with your business.
Gauge the value of your billboard to your tenant
If your billboard gives a higher value to your tenant, such as being strategically located where income prospect is high or it is more accessible for your tenant to maintain the billboard and make the necessary repairs when needed, it will be unlikely that your tenant will cancel the lease contract. The odds of cancelling the lease contract by your billboard tenant are low if you find a tenant who will find more value to your property.
The effect of the market conditions
Market conditions can have a significant effect on the decision making process of your tenant on whether it is still viable to keep the lease contract or to cancel it when the market no longer yields an income prospect. It is obvious that billboard tenants will also depend upon the turnaround of their market performance and will likely cut down costs when their billboard ads are no longer relevant to their profit objectives. Getting the help of a billboard lease advisor can help you determine the value of your billboard site according to your tenant’s market needs. Before entering into a lease contract, it is best to know your billboard tenant’s business, its needs and the reason why they choose leasing your billboard. This will give you an idea on how to leverage your billboard business and making it valuable to your tenant.