Commercial tenants tend to be easier to manage (they’re generally not as demanding), but commercial buildings definitely aren’t. There’s more to manage, considering how large some buildings can be. Plus, you aren’t only catering to your tenants’ needs, but also their customers’ needs. But just because the job is challenging, doesn’t mean you shouldn’t do it. Commercial property management may be hard, but it’s doable, especially if you follow the best practices in commercial property management.
In this article, we share why managing your commercial property is so important. We also share our top commercial property management tips to help you run your rental like a pro:
Importance of Commercial Property Management
Whatever type of commercial property you invest in, it’s important to spend time managing it. Proper management is the key to unlocking the rewards that come with commercial property ownership. Below are a few of the benefits you’ll be able to reap by managing your commercial property well:
#1 More Customers, More Rental Income
If you spend the time to maintain your property and make sure that it’s worthy of people’s time, more people will visit. More foot traffic means your tenants will be able to make more money from their businesses. They won’t want to give up their space because they’ve already seen the success it can bring. As a result, they’ll be more willing to pay more rent when you raise your rates.
Pro Tip: When raising your rental rate, be sure to consult a commercial property management company. You can raise your rent yearly but don’t charge too much as this can discourage existing tenants from renewing, and new tenants from renting. As a rule of thumb, your rate should be similar to the rates of comparable commercial properties in the area.
#2 Maintenance Increases Property Values
In real estate, it’s no secret that routine maintenance can increase an investment’s value over time. That’s precisely why you should improve your property over the years. That way, you can make your property more attractive to prospective tenants, as well as meet your current tenants’ needs.
#3 Steady Cash Flow
Maintaining your commercial property means you’ll be able to attract more customers to it. And when foot traffic is good, business will be good, too. This means your tenants will be making money consistently and can make their monthly rent without any trouble. Since you can collect rental income on time, you can benefit from a reliable cash flow. (Of course, you’ll still have to screen your tenants to ensure they have no history of late rent payments).
#4 Attract More Commercial Tenants
Once the word gets out that you’re a responsible property owner, more businesses will want to rent with you. Your current tenants will recommend you to their network, so you won’t have to look for tenants yourself and deal with vacancies. Remember, even if commercial tenants may not be as demanding as residential tenants, they still want to do business with a landlord who understands how vital property management is to their operations.
#5 Reduce Repair Costs
Seasoned property owners are aware that postponing repairs is a no-no in real estate. A well-managed property is a well-maintained property – and if your property is well-maintained, that means you’re dealing with structural concerns wisely. Performing repairs before the problem can worsen is one way to cut costs and save money.
Tips for Savvy Commercial Property Management
Commercial properties are more challenging to manage because of the scope of responsibilities. With that said, as a commercial property owner, you’ll have to level up your management game. Below, we’ve put together a couple of tips on how you can be savvy as you manage your South Florida commercial space:
#1 Start Using Property Management Tools
Since you’ll be dealing with a lot of tenants, you’ll also be dealing with a lot of data. Instead of keeping your files in a folder, take advantage of software such as accounting tools, tenant portals, etc. to easily keep track of everything. By doing so, you’ll be able to save time (you no longer need to dig through folder after folder) and give your property managers access to rental-related data at any time.
For instance, if you need detailed records of rent receipts, you can pull that information in no time. Or, if you need to prove that you’ve maintained the property, you can download years’ worth of data in mere minutes. Without software, that would otherwise take you days or weeks to do.
Do note, however, that your staff will be in trouble if they aren’t familiar with data privacy laws. To be safe (and to avoid lawsuits), decide to partner with a professional property management team instead. Professionals are well-versed with the laws surrounding sensitive data and will practice confidentiality at all times.
#2 Maximize the Space
Commercial properties are all about the number of spaces that can be rented out. If you feel that your property isn’t configured properly, partner with a professional property management firm to figure out how to maximize the space.
For instance, if you notice that some areas are under-used, you could build more rentable spaces. That way, you can rent to more people and collect more rent. Or, if your tenants complain that it gets too crowded during certain times of the day, you could change the layout in a way that redirects traffic. Don’t forget to ask your tenants what they need to make their day-to-day operations easier – they might want you to add a conference room or waiting room for their guests.
#3 Create a Foolproof Maintenance Plan
Commercial property maintenance can’t be hit-and-miss. You should create and commit to a maintenance plan. Set alerts for tasks such as HVAC maintenance, which needs to be conducted at least twice a year for commercial properties. Consider software that can “predict” faults so you can be as proactive as possible. Partner with a property management company that can tackle maintenance-related tasks for you, especially if you’re running your property from afar. That way, your tenants won’t have to deal with any downtime, and you can keep your property safe from disasters such as electrical fires, indoor floods, and more.
Commercial property management may be challenging, but these tips can make things more manageable. At Luxury Property Care, we want you to succeed as a rental property owner. That’s why we don’t keep our top tips a secret and provide all-around property management services to South Florida real estate investors. Reach out to us today for more information about our commercial property management – we’re one of the best in South Florida, so you can rest assured your property will be in capable hands. Call (561) 944 – 2992 or complete our contact form to schedule a commitment-free consultation with our property management pros.