Commercial real estate is a bit different when it comes to property management. In many respects you are dealing with multiple tenants as part of one big income cash flow. The process takes a lot of focus and effort.
The property managers that you apply in your real estate agency to a client’s portfolio should be suitably experienced with the property type in question. You also need good systems that can control all activities in the property for all the vested interests and parties concerned.
Understand who the client is and what they need from you. Work to their goals and targets; don’t just collect the rent and leave things at that only. As a property specialist your services should be finely tuned and professionally provided.
Here are some rules to help you in establishing your commercial property management systems.
- From the initial appointment, get to know the plans of the client (landlord) with regard to how long they want to hold the property and what the ultimate goals may be. These two facts will influence the way that you handle the rental strategy and the leasing of vacant and occupied areas.
- The age of the property will have some impact on operating costs. The older the property the more complex the operating costs and the greater the property upkeep. Failing to maintain a property will detract from occupancy and customer perception. Ultimately a poorly maintained property will see a lift in the vacancy factor and a lowering of market rental. Many landlords that ‘self-manage’ tend to cut corners on essential maintenance issues only to find that their tenants at lease expiry move to other nearby quality properties in the same general location.
- Lease management remains a key component of looking after a property for a landlord. All leases are individual when it comes to terms and conditions. On that basis the property manager should review all leases frequently and stay ahead of critical dates and tenant requirements. Stability is what you need in the tenant mix and that will only occur when you keep close to all current and upcoming issues.
- The contracts of maintenance in a property will be varied and numerous. In a larger property with many tenants the issue is quite complex. Stay close to the contractors to get their specialised comments on operating issues and problems that can impact property performance and occupancy. Also watch out for the large expenses in capital items that will need to be replaced during the year within the property.
The ‘perfect property management system’ is closely geared to the client, the tenants, the property function, and the local area. Understanding your facts and priorities will help you establish a good system of management. Communicate with your tenants and landlord client to keep your property well under control.