Investing in commercial property may involve investing in multi-family real estate or in buildings that are rented for commercial and industrial purposes. Commercial rental property encompasses everything from a rental house to a large apartment building, a large industrial warehouse, or an office building. Anytime you own investment property that you do not live in and intend to earn money by renting it out, this property can be viewed as commercial property.
If you are a commercial property owner, you will need to understand commercial property management. Managing your property effectively is the key to making your investment worthwhile. Manage your property well while helping you get and keep tenants and help you improve your property value so you can benefit from property appreciation.
Understanding of commercial property management
When most people think of commercial property management, the focus is on tenant relations. This is, in fact, a key part of commercial property management. After all, you need to have tenants so you don’t have a vacant property that costs you money to operate but doesn’t generate cash. You need to keep your tenants happy so they want to stay, and you need to make sure tenants follow the rules of the lease so they don’t damage your property or disturb other tenants. You will need to respond to tenant complaints, make necessary repairs if there are problems affecting your tenants, and make sure you collect rent regularly. If a tenant leaves, you’ll also need to find a new tenant to take their place so you don’t lose your rental income.
While tenant management is the cornerstone of property management, it is not the only important aspect of commercial property management. You also need to take care of the building itself to ensure your property doesn’t deteriorate and keeps pace with competing spaces so it can remain attractive to tenants.
This means that part of commercial property management is performing ongoing maintenance and regularly updating your space. You don’t want to let problems go until they become big problems, and you don’t want to put off maintenance until you have problems. Instead, you’ll want to make sure you’re always up-to-date with important systems and infrastructure in your building. If the systems need servicing, for example, you’ll want the service to be done to keep things running smoothly. The renovations you’ll want to do should be done in line with what other similar apartments or commercial buildings in your area are doing.
Finally, the last part of property management focuses on budgeting. This includes establishing an operating budget, setting rents, and ensuring you are cash flow positive so that your commercial property can prove to be a sound investment that will generate income for you on an ongoing basis.
