Investing in commercial property may involve investing in multi-family real estate or in buildings that are rented for commercial and industrial purposes. Commercial rental property encompasses everything from a rental home to a large apartment building, large industrial warehouse, or office building. Any time you own property as an investment that you do not live in and intend to earn money by renting it out, this property can be viewed as commercial property.
If you are a commercial property owner, you will need to understand commercial property management. Managing your property effectively is the key to making your investment worthwhile. Managing your property well while helping you find and keep tenants and will help 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 doesn’t generate cash. You need to keep your tenants happy so they want to stay, and you’ll need to make sure the tenants follow the rules of the lease so they don’t damage your property or disturb other tenants. You’ll need to respond to tenant complaints, make necessary repairs if there are problems affecting your tenants, and make sure you collect rent regularly. If a tenant leaves, you will also need to find a new tenant to take their place so you don’t 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 to ensure that your property does not deteriorate and that it keeps up with competing spaces so that it can remain attractive to tenants.
This means that part of managing commercial property is performing ongoing maintenance and regularly updating your space. You don’t want to let problems slide until they become big problems, and you don’t want to put off maintenance until you have problems. Instead, you’ll want to make sure you’re always up to date with your building’s important systems and infrastructure. If the systems need servicing, for example, you’ll want the servicing done for everything to work properly. The renovations you will want to do should be done in line with what other similar apartment or commercial buildings in your area are doing.
Finally, the last part of property management focuses on budgeting. This includes setting an operating budget, setting rents, and making sure you are cash flow positive so that your commercial property can be a good investment that will generate ongoing income for you.
