In managing a commercial or retail property, there are many things to monitor from the perspective of maintenance, lease management, cash-flow, and rent control. The best way to control things will be through some dedicated software program; there are several good programs available for review and consideration, but they all have differences and costs.
Some of those programs are more suited to basic commercial or retail investment properties whilst others are uniquely suited to complex multi tenanted retail shopping centres and office towers. It should also be said that some of those programs are more complex from an education and knowledge perspective; that will require a specific person in your team being trained to use the software accurately and specifically as part of the property management process.
Carefully Choose Your Property Management Software
So, some decisions need to be made here with your software program, relating to the types of buildings you will manage, the types of clients that you will be servicing, and the depth of your property portfolio over time. Many cheap software programs do not offer the flexibility or the reporting capabilities that you may require with the more modern buildings of today.
Select the best property management system that ideally suits your portfolio and typical property or client type. Understand the different types of property that you will manage into the future and how you will need to report to that, as it can be a costly exercise to change property management software programs mid-term or later when you have many more properties under management.
Here are some of the important categories to consider as part of the dedicated property management system that you will be using:
- Rents by type – you will always be collecting the rents in a property for the tenancies given the individual leases and occupancy situations. There will be gross rents, net rents, and outgoings to consider as part of the invoicing and charging process. Will the invoicing system support the charges that you must raise with all tenants through the year? Don’t forget the complexity required at reconciliation and rent review times. Also, consider the complexity of the tenancy mix and the tenants in occupation.
- Outgoings – the property outgoings or expenditure recoveries under the lease will be different for each tenant in occupancy. The outgoings to be recovered will be relative to the lease and the negotiated lease situation. So, you need to know your leases as part of considering the suitability of a property management system.
- Budgets – most complex office towers and retail shopping centres will have a budget to work to as part of the financial controls that you set for your clients and work to. The budgets will have property standard codes to categorize income and expenditure. Look at the capabilities of your software alternatives so you know that the required controls and reports can be generated with all elements of financial activity.
- Billing cycles – most rental billing cycles are monthly and there will be other variations to consider including quarterly budgets, annual budgets, and annual reconciliations. From the billing cycles, you will need to extract elements of financial control and forecasting.
- Legislative requirements -there will be special elements of control required under property legislation in your location. Taxes will need to be paid, income tracked, and performance reports created in keeping with local property legislation. The greater the number of properties that you manage, and the greater number of tenants that are in those properties you will find that pressures will occur from a reporting perspective. Choose the software that comprehensively assist you with your property and reporting requirements and local legislation.
- Rent reviews and critical dates – every lease and every tenant in occupancy will be subjected to rent reviews and critical dates. Those factors will be explained in lease documentation and tracked through diary entries or critical date reports. The property manager or the center manager must watch the critical dates. Extract the dates from all relevant and current occupancy documents and then capture them into the selected property software program. The software can help you stay ahead of the date changes and the pressures on tenancies. Ultimately you can then reduce the factors of tenant volatility and vacancies.
- Arrears identification – when a tenant goes into arrears, you need to know that fact early, and respond accordingly. The greater the number of tenants that you have in a property, the more difficult the issue will be in identifying rental problems.
- Tenancy schedule – one of the most common documents used in property management today will be the tenancy schedule. In that schedule, there will be a concise summary of lease activity, area occupancy, and rental. You want to be able to print and accurate tenancy schedule easily get any point in time. That schedule should be in the approved client reporting standard.
- Codes for income and expenditure allocation – as mentioned earlier, there will be codes for categorizing income and expenditure activity in any property. Those codes should be standard to the industry and the property type. The property management software program will have something to do with that. The standard codes make it a lot easier when it comes the time of tenancy or tenancy mix reconciliation, or property analysis. Ask plenty of questions about the reporting capabilities of income and expenditure in your property management systems. Know how to extract the correct reports for the client, the property, and the tenant’s situation. Create great schedule of reports that apply to a property and client monthly. Every day or each week the reports can be sent out to the clients as previously agreed and nominated as part of the property management appointment.
- Landlord reporting – every landlord will have unique requirements relating to property reporting. There will be reports across income, expenditure, forecasting, and budget activity. There will also be reports relating to risk management, tenancy placement, tenancy mix, and the moving annual turnover of sales between the merchandise groups and the tenants. Devise the reporting system that works your clients in every way possible. Understand who your VIP clients will be when it comes to property reporting and property control.