Whether you’re interested in a future venture of investing in commercial real estate or you currently own commercial property and would rather have someone else handle the details, you should consider hiring a property management company to take the reins. Choosing a property management company is a big decision, and not every company will offer the same level of service or be the best fit for your needs. However, when you do find a property management team that is well suited for you and your investment, you will soon realize why they are worth their weight in gold.
In this blog post, we will highlight the benefits of hiring a professional property management team and show you why one of the best ways to increase the value of commercial real estate is through exceptional property management.
Higher quality tenants
Attracting quality tenants is no easy task. An experienced property management company has reviewed plenty of applications and knows precisely how to analyze a prospective tenant’s personal and financial information for any potential red flags. Think of a property management team as your professional match-maker in this case. By using a thorough application process, a property management team can screen out any potential “bad seeds” and plant only the good ones in your space.
Avoid time-consuming and costly legal issues
As a commercial property owner, it is critical that you understand your responsibilities and obligations to your tenants. For this reason, keeping up with landlord-tenant laws and new regulations that are constantly coming into effect is vital. Why? Staying out of legal trouble could depend upon your knowledge and compliance with these laws. Luckily, this is where your property management team can lend you a helping hand. A qualified and reputable property management company is equipped with extensive knowledge of the latest landlord-tenant laws and knows how to navigate the numerous complexities to make sure you and your finances are not left in a vulnerable position.
Higher tenant retention and shorter vacancy cycles
In addition to the cost of lost rent while your space sits empty, there are other equally critical issues that are associated with a high tenant turnover rate. The turnover process also involves improvement and advertising costs, commissions, and all efforts associated with marketing, showing, screening and settling in a new tenant. This is a time-consuming and costly process that can often be avoided by keeping tenants satisfied and well cared for. A quality property management team will have a tenant retention program in place that ensures happy tenants with lengthy stays in your properties. These types of programs require a persistent, systematic approach, which is where a professional and experienced property management company will truly shine.
A knowledgeable and professional property management team can also help you fill your vacancies as quickly as possible. How do they manage to do this? Let’s take a look at a few examples.
1. Preparing your property for rent: As we know, extended vacancies are costly, and losing thousands of dollars in earning potential is not a position that any commercial property owner wants to be in. An experienced property management company understands what it takes to fill these vacancies, including how to make your property appealing to prospective tenants by suggesting and overseeing cosmetic improvements. These improvements can also be helpful in maximizing revenue.
2. Determining the best rent rate: Setting the rent too high can lead to extended vacancies and setting the rent too low can be just as costly. How do you determine a price that is just right? Determining an accurate and competitive rental rate requires comprehensive knowledge of the local real estate market and access to professional rental rate tools. These rental incomes will become annual cash flows that will serve as the fundamental basis for your property’s overall value—so needless to say—these figures are of paramount importance.
3. Effectively marketing your property: While marketing your property can be a time consuming and meticulous pursuit, doing so is crucial to getting your property leased as quickly as possible, but it must be done effectively. An experienced property management team is well versed in creating effective marketing ads and knows precisely how to market your property to attract quality tenants quickly. Additionally, they can help negotiate lower advertising rates, both online and offline.
Manage day-to-day tenant activities
An experienced property management team can also keep you separated from day-to-day tenant activities, such as routine maintenance and repair requests. By serving as the point of contact for such tenant operations, a property management company will be there to remedy the issue in a timely and professional manner. Additionally, enlisting the services of a property management company will not only allow you to reclaim some of your time, but also provide you with peace of mind knowing that your tenants and investment are in good hands.
Tighter rent collection process
In a perfect world, you could just sit back, relax, and let the rent roll in. While most commercial property owners understand there is more to the job, some might be surprised to hear that the success or failure of your investment depends largely on how you handle the rental income. Collecting rent on time each month helps to maintain consistent cash flow, and your tenants need to understand this is non-negotiable. By hiring a professional and experienced property management team, you put a buffer between yourself and the tenant, and allow them to act as the enforcer, while upholding the terms of each lease.
Increase the value of your investment
Poorly maintained buildings lead to frequent equipment failures, decrease an asset’s lifecycle, and lower the value of a property. Luckily, an experienced property management company has programs in place that detect and cure maintenance and repair issues early on, before they eventually become larger, more costly problems. A preventative building maintenance program by design is intended to reduce costs, limit failures, reduce the likelihood of sudden equipment outages, maintain and extend the lifespan of your assets and schedule maintenance when it is most cost effective. Preventative management can be very complex and time consuming and fortunately, you can rely on a qualified property management company to organize and carry out your preventive maintenance needs, leaving no stone unturned.
Final thoughts
As a commercial property owner, it can be difficult to keep track of every little detail associated with your investment property, especially when your schedule doesn’t allow for much flexibility. By hiring a professional and qualified property management company, you can increase the efficiency and profitability of your investment and sleep well at night knowing that everything is being handled just as it should. Note: Before hiring a property management company, be sure to conduct a thorough background check to establish their reliability, competence and ability to handle your property.
