When you work as a commercial property manager or retail shopping centre manager, the property management system that you provide to your clients should be optimised for each property requirement. This then says that every property will have the unique controls and reports that a client requires. Here are some tips from our Newsletter.
This is not for the ordinary client, and will command a fair fee for the work involved. I am not happy to see agents base their property management fee on a percentage of passing income; whilst such fee may give them some idea of what a fee could be, the reality is that the fee should really be based on the time involved in managing the property. Every client and every property is different; you must base your fee calculation on the work 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. That is not a good outcome.
Before you quote a property management and or leasing fee, check out the property and the requirements of the client. Understand what is really required to control the asset and the vacancies that will come up from time to time.
Older properties are very challenging when it comes to management. Maintenance will be higher and the tenant relationships can be strained due to the pressures of the older property on the tenants and the tenant mix. If the landlord wants to hold back in maintenance to save on expenditure then the fundamentals of property performance are put under pressure. The property manager is caught in the bind between the landlord and the tenants; in such situation it is hard to produce a quality property management service.
Quality landlords and good properties require a custom designed property management system. That’s the rule; if you want good fees you have to provide the comprehensive system of management to back up your fee.
Here are some categories to help you do just that.
- Lease management will be high on the agenda. Leases contain critical dates relating to rents, options, insurances, make good, expiry, and many other things. Get to know your leases in your managed properties.
- Tenant contact should occur frequently so the tenants learn to trust the property manager. Over the long term this relationship will be fundamental to property performance.
- 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.
- Maintenance management will be ongoing. Having a budget for the property as mentioned earlier will help with the maintenance plans. Always talk to the contractors in the property to get a briefing on the performance of the big plant and equipment that could upset occupancy and property use if major plant failure is to occur.
- 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 have some impact on 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 in code and safety compliance.
- Tenant mix changes will happen frequently. In a larger property with many tenants the issue of tenant mix becomes a factor of strategy and planning. The tenant mix plan should be part of the property business plan.
- Energy and environmental are ever more important today. They can have 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.
Landlord reporting will be unique to the landlord and the functions of the property. Many of the things in the list just provided will feature in a comprehensive reporting system to the landlords that you act for. That is why your commercial property management system should be custom designed.
You can get more tips like this in our Newsletter.