Top 5 Common Pitfalls for Commercial Landlords and How to Avoid Them

Owning commercial property can be one of the most rewarding investments in Alaska's growing market—but it isn’t without its challenges. Many landlords enter the space with a strong property, great tenants, and high hopes, only to run into costly issues that could have been avoided with a little more preparation. From legal missteps to poor communication, the pitfalls can add up quickly and eat away at your returns.

Whether you’re a seasoned property owner or new to the commercial real estate game, this post outlines the top five mistakes I see landlords make—and how you can sidestep them to protect your investment and maximize profitability.

1. Neglecting Lease Clarity

A vague or poorly structured lease agreement is one of the most common and expensive mistakes a landlord can make. If your lease doesn’t clearly outline who is responsible for maintenance, property taxes, insurance, CAM fees, and late penalties, you're setting yourself up for conflict and financial exposure.

How to avoid it: Work with a commercial real estate attorney and experienced broker to create a detailed lease that protects your interests and clearly defines tenant obligations. Review it regularly and update it as market conditions change.

2. Failing to Screen Tenants Thoroughly

It’s tempting to lease to the first business that shows serious interest—but rushing into a tenant relationship without proper vetting can be costly. If a tenant can’t meet their lease obligations, you may be facing vacancies, legal battles, or worse.

How to avoid it: Implement a thorough screening process that includes reviewing business financials, checking references, and verifying credit and payment history. A good tenant broker can help qualify prospects before a lease is signed.

3. Overlooking Routine Maintenance

Deferred maintenance is a silent killer of property value. Small issues like HVAC inefficiencies, roof leaks, or cracked asphalt can snowball into major repairs, tenant dissatisfaction, and code violations if not addressed early.

How to avoid it: Establish a proactive maintenance schedule. Budget annually for preventative upkeep, and perform regular site inspections. Tenants appreciate responsive management—and a well-maintained property retains value.

4. Underestimating Vacancy and Turnover Costs

Many landlords over-project cash flow by assuming uninterrupted occupancy. But even in a strong market, lease expirations, tenant relocations, or business closures can leave a space empty longer than expected.

How to avoid it: Always budget for 5–10% vacancy, and plan for re-leasing downtime. Keep reserves on hand, and develop a marketing strategy in advance so you can quickly attract new tenants if one leaves.

5. Lack of Professional Property Management

Trying to manage your own commercial properties—especially if you have multiple units or locations—can quickly become overwhelming. Missed deadlines, poor communication, and tenant frustration are all signs that management may be slipping.

How to avoid it: Consider hiring a professional property manager or partnering with a brokerage that offers full-service leasing and management. You’ll gain time, tenant satisfaction, and operational efficiency.

Final Thoughts

Commercial property ownership offers incredible potential for passive income and long-term equity—but only if it’s managed well. By avoiding these five common pitfalls, landlords can stay ahead of costly surprises, protect their investment, and build long-term tenant relationships that drive stability and profit.

If you’re looking to improve your property management strategy or need help structuring leases, screening tenants, or reducing turnover, let’s talk. I’d be happy to help you navigate the Alaska commercial landscape with confidence.