A Custom Designed Commercial Property Management System for Agents
When you work as a commercial property manager or retail shopping centre manager, the property management system you use for your clients should be optimised for each property’s requirements. This means that every property will have the unique controls and reports that a client requires.
This is not for the ordinary client and will command a fair fee for the work involved. Agents should not base their property management fee on a percentage of passing income; whilst such calculations may give them some idea of what a fee could be, the reality is that the cost should be based on the time involved in managing the property. Some properties are time-intensive to manage.
Download retail property checklist here
Checklist for real estate agents in sales, leasing, or property management.
Get the fully detailed retail property and shopping centre checklist in PDF form for your ongoing reference and use in sales, leasing, or property management activity with investment properties.
Every client and every property are different; you must base your fee calculation on the work estimated and involved. If you do it any other way, the property management division of your office can, by default, be a loss generator based on operational costs for the PMGT Team. That is not a good outcome.
quoting Property Management Fees
Before you quote a property management and/or leasing fee, check out the property and the client’s requirements. Understand what is required to control the asset, the tenancy mix, and the occasional vacancies. Create a time-based assessment of how much work is involved in managing the property.
Think about the variables. Older properties are very challenging to manage. Maintenance will be higher, and tenant relationships can be strained due to the pressures of the older property on the tenants and the tenant mix.
- How is the landlord going to let you manage the property?
- Are there to be restrictions and constraints?
If the landlord wants to hold back on maintenance to save on expenditures and running costs, then the fundamentals of property performance are put under pressure. The property manager is quickly caught in a bind between the landlord and the tenants; producing a quality property management service in such a situation is challenging.
property management system
Quality landlords and properties require a custom-designed property management system. That’s the rule: if you want good fees, you have to provide a comprehensive system of management to back up your fee. The fee you charge and collect should be based on the work involved and the property itself. Do a time-based assessment to reach that opinion.
Here are some categories to help you do just that.
1: Lease and Occupancy Documents
Lease management will be high on the agenda. Leases contain critical dates relating to rents, options, insurances, make goods, expiry, etc. Get to know your leases in your managed properties.
2: Getting in touch with Tenants
Tenant contact should occur frequently so the tenants learn to trust the property manager and communicate occupancy needs or pressures. Over the long term, this relationship will be fundamental to property performance.
3: Cashflow and income streams
Income and expenditure should be optimised given the requirements of the property and the client. The only way to do that with any success is to create a property budget as part of the annual property business plan. Each month you track the actual costs and income to the business plan.
4: Maintaining the property
Maintenance management will be ongoing. As mentioned earlier, having a budget for the property will help with the maintenance plans. Always talk to the property’s contractors to get a briefing on the performance of the bigger plant and equipment that could upset occupancy and property use if a major plant failure occurs. How serviceable is the essential plant and equipment in the property?
5: Find and Control Risks
Risk is part of property ownership today. Risk will come in many forms and will need some control and systemisation. Building code and safety compliance will impact risk and property use. Most property managers only have an overview of this complex property topic. When in doubt, seek expert consultants to tell you what the property requires regarding code and safety compliance.
6: Finding Better Tenants and Improving the Mix
Tenant mix changes will happen frequently. In a larger property with many tenants, the issue of tenant mix becomes a factor in property management strategy and planning. The tenant mix plan should be part of the property business plan.
7: Energy Costs and Outgoings
Energy and the environment are ever more important today. They can have a significant impact on property operating costs and use. Review where your property sits in comparison to other local properties of similar type with these categories.
8: Custom Designed Landlord Reporting
Landlord reporting will be unique to the landlord and the property’s functions. Many items in the list just provided will be featured in a comprehensive reporting system for the landlords you act for. That is why your commercial property management system should be custom-designed.
