Profit is the key for any commercial property investor. The ancient model of commercial property investment is still the most sought-after business model. Purchasing a property, acquiring tenants, allowing the property to appreciate over time, and then selling at a profitable rate is one of the best ways to make money from your commercial property. Although this sounds amazing, there are several pitfalls that you need to avoid on your way to being successful.
If you’re beginning your commercial real estate journey, then here is all you need to know if you are looking for simple ways to make money from your commercial property.
Perform a thorough research
It is vital to have a proper understanding of prevalent market conditions if you want to make a fortune from your commercial property. Real estate markets are similar to stock exchanges and are a volatile market segment. With price fluctuations happening often, doing market research would be of great help. When the prices of the assets are high, that would be an appropriate time to sell your property. Acquaint yourself with the trade tricks of the real estate industry. Educating yourself should be your first step in preparing your property for making gains.
Allow more than one company
If we look at a majority of retail properties, most of them are occupied by a single tenant. Despite offering an eclectic mix of services, there would still be a single tenant managing the place. However, when we look at office space, there is an opportunity to maximize operating profits if you lease the space to more than one firm. This arrangement would promise numerous advantages to the users. Firstly, if a business fails, then the investor would not lose his earnings in a go. Second, the total income from two or more tenants is likely to be higher than what you would get from a single tenant occupying the entire space.
The digital era has given rise to numerous businesses. Startups don’t take much space to operate and would simply not prefer working from home. They are looking for commercial properties that offer them all the benefits at reasonable prices that they can afford. Providing a community workplace referred to as an incubator would be a great option if you want to monetize your commercial property. Community workspaces appeal to startups as they come with shorter lease contracts.
Commercial tenants can lease space for a few months rather than be tied in a contract for up to five years. Small businesses prefer renting meeting rooms and boardrooms on an hourly basis. Many of them don’t require them at all. Providing food and beverages on the site can also add up to an additional income stream for an already lucrative market segment.
In this era of digital marketing, it could be easier to assume that traditional forms of advertising are dead. However, that isn’t true. Even today millions of dollars are spent on print media and billboard advertising. This is a good opportunity for commercial property owners who can rent out some space of their exterior property as media space. If you have an office space on a busy road that is subjected to a lot of passing foot traffic, your commercial space would come across as an attractive proposition to advertisers.
If your space is in a prime location, then you can generate two forms of revenue. You can own a billboard and sell it directly to advertisers. The major benefit here is that commercial landlords have complete control over the content and can set whatever rates are acceptable.
Without proper experience, an investor would find themselves at the beginning of a steep learning curve. They would also need to learn about advertising standards and sourcing the best brands to put adverts up. This is when you need to adopt a realistic approach and partner with an expert media agency. They would manage all the aspects of media to give you a perfect solution.
Much like investing in residential property, it is incumbent on commercial property investors to add value to their property units. This process works on two levels. A property in a good state of repair is more likely to attract a greater array of potential tenants. This implies that the landlords can assess each company based on its merit rather than renting property to people making the first offer.
Also, preparing a property would translate into lower maintenance costs down the line. Several commercial tenants also cover the maintenance of the building as a part of their lease contract. Tenants could also claim damages against any interruption in their work causing the commercial landlord’s insurance premiums to rise.
Hiring competent staff
If you can find suitable clients on your own, then it is great! Else hiring a competent property manager who will manage all the tasks on your behalf would be beneficial. It isn’t easy to make customers compete for a single property and make them pay rent on time. An efficient workforce can carry out tasks seamlessly so that you don’t have to worry about anything.
Turn to Luxury Property Care for your commercial property management needs!
Luxury Property Care is a full-service commercial building property management company preferred by real estate investors who dream of running an empire. We add quantifiable value to your business allowing you to generate endless passive income. Wondering how exactly we can help you make more? Give us a call at (561)944-2992 to reach out to our expert property managers today!