Unemployment in the United States is slowly starting to creep down which means businesses are feeling more emboldened to open up shop. That’s great news for you as a commercial property owner/manager because the more businesses that exist in the economy, the lower vacancy you’re going to have.
If you’ve been managing one of your first commercial properties recently and struggled through 2020, you’re not alone. Several property owners/managers saw higher than normal vacancy and delinquency during the year.
To turn your fortunes around in 2021, our team has compiled a list of commercial property management tips that’ll help you navigate the market more successfully and ultimately, drive more revenue from your property.
Keep reading to learn more.
1. Understand Your Renter’s Needs
If you don’t understand your customers, you’re going to have a hard time engaging with them successfully. For example, if you’re advertising one of your commercial units as being perfect for a dance company, you’ll likely find it sitting empty for a long time as indoor physical activities have been restricted in many parts of the country.
By knowing that about your customer, that they’re shut down, you can reposition your unit to an industry that is considered more essential by regulators in your area.
The better you can put yourself in your buyer’s shows, the better you’ll be able to figure out who’s worth marketing your spaces too.
2. Find Ways to Drive Up Value
Many people don’t know this but commercial property and residential property are one in the same if you have over 5 units in a building. So, let’s say you have a 5-unit apartment complex that’s cash-flowing $1200 per month.
How could you increase that number by 10% this year?
You could rehab a basement with the help of factory painting specialists and rent it as a business space, you could raise rents, you could split a 2 bed/2 bath unit into two 1 bed/1 baths, etc.
The more ways you can find to make your property worth more, the more money you’ll make in addition to your building’s appreciation.
3. Build Your Maintenance Team
Things will inevitably go wrong with your property. Plan for this financially and also plan by having a great team ready to go the moment you need them.
Great maintenance contacts include a plumber, an electrician, and a general contractor.
Between the three of those people, you should be able to have a person available to fix an issue within 48 hours of a complaint so you can avoid legal ramifications.
4. Make Paying Rent Easy
Don’t be one of those landlords that make people jump through hundreds of hoops to get their rent paid. Having a tenant put a check in an envelope, walk down to the post office, and mail it is insecure and headache-prone.
The sooner you can set up direct deposit or some other simple means of fast payment, the happier your tenants will be and the higher odds you’ll have of getting paid at the end of each month.
5. Be Good to Your Tenants
Being great to your tenants is the right thing to do. After all, their willingness to do business with you is why your commercial property management aspirations are working out.
Believe it or not, being friendly and responsive to tenant requests can mean the difference between a 10% vacancy rate and a 5% vacancy rate, and that matters.
If you can do something within reason to reduce the turnover of your units, make an effort to do so and enjoy the financial rewards that accompany that.
6. Have an Excellent Legal Contact
The last thing you want to deal with as a property manager/owner is legal issues. Unfortunately though, they have a tendency of cropping up.
Is your space zoned for the kind of commercial client you have sitting in it? Can you evict that tenant that hasn’t paid you in two months?
All of these questions carry intricacies that are best answered by a real estate attorney, not Google. Most lawyers will consult with you for free which gives you some agency to interview a few prospects to discover who you’ll call when things get tough.
7. Screen Tenants Well
Depending on where you live, getting a bad tenant off of your property can be a multi-month nightmare that will set you back thousands of dollars. Rather than fighting that fight, do some diligence on the front end and work hard to find great tenants.
Finding excellent tenants that are not likely to cause trouble and very likely to pay their rent usually requires a credit check, background check, and in some cases, references.
While gathering that information takes time and in the case of the credit/background checks, costs money, believe us when we say that those costs pale in comparison to what you’ll pay if you end up working with a troubled tenant.
Commercial Property Management Can Be Easy With the Right Values
A lot of investors stray away from commercial property management because they know the residential game much better. Truth be told though, most of the big money to be made with rentals exists in the commercial space.
So, take the tips we’ve shared with you to heart, build your commercial rental strategy, and start renting successfully. With a little bit of diligence and the right guidance, you’ll master the commercial game and start enjoying returns that dwarf what you’ll find with single-family houses and the like.
For more property management tips, check out additional commercial property posts on our blog.