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Owning commercial property, whether a medical office building, strip mall, or standalone car lot, requires next-level dedication to ensure profitability. You need to attract quality business tenants that are proud to call your business property home, which means keeping your building and surrounding grounds aesthetically pleasing and functional.
✓ If you’re a new commercial property owner or are looking for ways to improve curb appeal, the following five tips can help achieve this goal and earn higher rent.
5 Tips For Commercial Property Management
1. Maintenance Should Always Be a Top Priority
✓ One of the biggest (and sometimes costliest) aspects of owning commercial property is maintaining it. It’s critical to give high priority to any maintenance issues that might arise for several reasons, including:
- Delayed repairs could lead to larger and more expensive issues.
- Tenants will become dissatisfied and possibly not renew their lease or complain to your local code department.
- Prospective lessors may opt to go elsewhere.
- As a result, your property’s value could decrease.
- Insurance companies may hike their rates because of the increased risk to your property from neglect.
✓ These are just a few potential consequences of not keeping your commercial building in good repair, which is why you should be proactive in your approach to maintenance. Instead of waiting for something to go wrong, regularly tour your property and note any issues that need to be addressed.
✓ Also, have a contact list of preferred subcontractors that can take care of repairs your maintenance team cannot.
For example, if your property comes with a parking lot and concrete walkways, don’t wait until a visitor breaks their ankle in a pothole to call a commercial paving company to repave your lot.
If you see pavement that is cracking and crumbling, you should already have a company on file chosen to handle these hazards.
2. Ensure Your Property is Suited for Its Use
✓ This is a common problem that new commercial property managers run into when taking on a new property. Managing a building effectively requires a thorough understanding of the industry it serves and the needs of operating a business in that market.
✓ A great example is manufacturing warehouses. If your tenant runs a CNC shop that produces hardware like screws and bolts, they will have significant waste to manage. While this aspect of their lease is likely their responsibility, you need to maintain the appeal of your property.
This means you would need to determine where dumpsters and other disposal systems are to be located to minimize waste on your property and keep litter to a minimum.
3. Your Profitability Depends on Tenant Happiness
✓ The backbone of any commercial property is its tenants. Your vacancy rate has a direct impact on revenue and overall profitability. If you have a high turnover rate, it’s time to step back and figure out why your tenants don’t want to stay.
Maybe they’ve outgrown their rented space or are dissatisfied with their unit or your management approach. Whatever the cause(s), getting to the bottom of the problem is vital because losing tenants comes with financial consequences besides lost lease payments.
✓ It may be your facilities need to be updated, or the property has lost its lustre and needs to leave a better impression on your tenants’ clientele. Whatever the cause, the financial impact can be staggering if you don’t stay on top of keeping your lessors happy.
4. Consider Upgrades to Boost Your Investment
✓ Maintenance is sometimes about fixing broken floor tiles or repairing leaking bathroom faucets. It also means ensuring your commercial property remains competitive in the marketplace. Successful property managers will regularly upgrade features in their buildings and surrounding grounds to maintain a modern appeal that draws in prospective buyers and tenants.
✓ After the pandemic drove many businesses to home-based offices, companies are now remerging but expect a more modern workspace for their money. They’ve learned the importance of having high-speed internet and VoIP phone services. Workers also want more expansive common areas that allow them to get the most out of breaks. Meeting rooms should provide a higher level of connectivity to make communication more effective and less of a hassle to set up.
✓ The upside of making technological upgrades is that it increases the value of your property for those using it, allowing you to demand higher-paying lease contracts.
5. Create an Efficient Management Process
✓ Commercial property management requires a solid organizational strategy that maximizes efficiency and enhances the tenant experience, which improves revenue. But, if you’re still relying on traditional filing systems and only taking checks or money orders for lease payments, you’re creating bottlenecks in your management process and cash flow.
✓ Having enough money on hand to pay bills and unexpected repairs is a must to minimize debt and keep profit margins healthy. Property management software can automate many of your traditional processes, reclaiming lost production time and offering more convenience for your clients with features like an online customer portal to make credit card payments on their leasing contracts.
✓ If you’re unsure what features to look for in management software, consider the following features:
- An online scheduler that syncs to your internal calendar
- Automated payment reminders via email and SMS
- Maintenance requests
- Vendor management
- Data analytics for turnover trends
- VoIP phone system for centralized calls and messaging
- Unit inspections and clean-out checklist
- Encrypted client data management
✓ With all these amazing features, imagine how much productivity and cost savings you and your team could earn back daily.
✓ The tips outlined in this article provide a solid foundation for successfully managing your commercial property. While there will be additional necessities based on your industry, these five suggestions are a common thread across them all. However, the most important takeaway you should get is that procrastination can hurt your bottom line when neglecting maintenance and repairs.
✓ Always have a dedicated subcontractor available for last-minute emergencies, and regularly keep your building and surrounding property in good repair. This will ensure current, and future clients will be proud of their workspaces and keep your property’s value high.
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