Investing in commercial property can involve investing in multi-family real estate or in buildings that are rented out for business and industrial purposes. Commercial rental property encompasses everything from a rental house to a huge apartment building to a large industrial warehouse or office building. Any time you own a property as an investment that you do not live in and that you intend to make money renting out, this property can be viewed as a commercial property.
If you are the owner of a commercial property, you will need to understand commercial property management. Managing your property effectively is the key to making your investment pay off. Managing your property well while help you to get and keep tenants and will help you to improve your property value so you can benefit from property appreciation.
Understanding 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 that doesn’t bring cash in. You need to keep your tenants happy so that they will want to stay, and you’ll need to make sure that the tenants follow the rules of the lease so they don’t do damage to your property or annoy other renters. You’ll need to respond to tenant complaints, make repairs as needed if there are problems that impact your tenants, and ensure that you are regularly collecting rent. If a tenant leaves, you’ll also need to find a new tenant to take his or her place so you do not 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 in order to make sure that your property doesn’t become run down and to make sure that it keeps pace with competitor spaces so that you can remain attractive to tenants.
This means that a part of commercial property management is doing ongoing maintenance and periodically upgrading your space. You don’t want to let problems go until they develop into big issues and you don’t want to defer maintenance until you have problems. Instead, you will want to make sure that you are always keeping up to date with the important systems and infrastructure in your building. If the systems need servicing, for example, you’ll want to have the servicing performed to keep everything operating well. The upgrades you will want to make should be done in keeping with what other similar apartments or commercial buildings are doing in your area.
Finally, the last part of property management centers on budgeting. This includes establishing an operating budget, setting rents and making sure that you have positive cash flow so that your commercial property can prove to be a good investment that brings income to you on an ongoing basis.