Property Management
Should You Invest in Property Management?
If you own commercial property and find yourself struggling to keep up with the everyday aspects of property management or feel that you’re not getting as good a return on your investment as you could be, you may be wondering whether a professional property management team is a good choice for you.
Here's what you need to know about the wide range of services a property management team can provide to help you decide whether professional management would be beneficial for your commercial property.
What Does Commercial Property Management Do?
The role of a property manager is diverse. The property manager takes care of everyday operations of the real estate asset, freeing the owner of everyday responsibilities and enabling the commercial real estate to be a passive form of income.
There is little involved in the everyday running of commercial property that isn't handled by the property management team. All kinds of commercial property can benefit from a property manager, from office and retail spaces to shopping centers and industrial properties. Whatever you do on a daily, monthly, and yearly basis to take care of your commercial property, the property management team can take care of for you.
Here are a few of the specific things that property management companies handle:
Overseeing Site Maintenance
This is one of the most straightforward aspects of commercial property maintenance, but also one of the most important. Landscaping is the first thing that a potential customer or tenant visiting a commercial property sees.
Attractive, well-maintained landscaping makes a strong first impression that the property is well-managed inside and out. Any property that serves the public requires excellent landscape maintenance. Apartments and multi-family homes also depend heavily on making good first impressions in this way.
Paying Operating Expenses
There are all kinds of things that go into running a commercial property - from cleaning and upgrades to plumbing, electrical, and HVAC systems to replacing lighting and air filters. A commercial property manager can schedule, check for quality work, and pay all of the operating expenses that go into any commercial property.
Managing Tenant Relations
Managing the relationship with tenants, from finding tenants, to taking care of any issues that come up, to evicting when necessary, is one of the things that many property owners like the least. In fact, many potential commercial property investors may be reluctant to make a lucrative investment because they don't want to worry about tenant relationships.
This is one of the places where property management really shines. A quality property management team will keep track of leases to ensure that every unit is occupied as much as possible. They'll deal with any disputes that come up and serve eviction notices and enforce them if necessary.
Financial Status Reporting
It's great to be able to be more hands-off as the owner of a commercial real estate property, but you don't want to feel the least bit distant from your investment status. Property managers provide comprehensive financial status reports to help you understand exactly how your investment is paying off month by month. You'll get reports on operating expenses, monthly income, accounts receivable, deposits, and much more.
Forecasting
An experienced property management team knows the ins and outs of the specific kind of commercial property they’re managing and how events in the neighborhood, world and financial market may affect the investment. A property manager may see an increase in home prices and know that is likely to result in an increase in demand for homes and plan appropriately.
Property managers constantly research so they’re the first to know when new opportunities may become available. For instance, a property manager will realize when office space is hard to find and may suggest a slight price increase for new tenants that could bring in significant additional earnings for the owner of the property.
Contract Services
A lot of paperwork goes into managing commercial property. As an owner, you don't have time to deal with every new lease contract and eviction notice. However, failing to handle any paperwork properly can leave you liable.
Your property manager will take care of all the various contracts that need to be made in the everyday management of your property, from tenant agreements to landscaping services to property improvements. Whatever contracts need to be drawn up, looked over, and signed off on, the property manager can take care of it.
Lease Compliance
The vast majority of tenants, whether residents of multi-family living or businesses in office spaces or commercial properties follow the lease, pay rent regularly and follow property rules. However, there will be times when the rent goes unpaid, property isn't treated with respect, or other problems come up. When a tenant fails to comply with the rules of the lease, the property manager can enforce the rules.
When is Property Management Useful?
The property manager has such a diverse role that it can be hard to realize exactly what situations they're helpful in. After all, the label “commercial real estate” covers a wide gamut of types of properties. Here are a few occasions in which a property management may be helpful to a commercial property owner:
- A landlord has a collection of single-family homes that they rent out and are having trouble keeping track of landscape management and rent collection.
- The owner of an office building is struggling to keep tenants in rental units and forgets when a lease is about to end and should be advertised again.
- An apartment building owner who participates in affordable housing programs is having difficulty with the federal guidelines that need to be followed.
In all of these cases, the property manager can smooth the road, relieving responsibility from the property owner while ensuring that every aspect of management is taken care of diligently.
Benefits of Commercial Property Management
It can be intimidating to turn over the management of your commercial real estate to somebody else. After all, you’ve probably invested a lot of money, and probably a good deal of time and effort into developing a commercial real estate enterprise that can earn a reasonable return on your investment.
However, when you consider all of the benefits that commercial property management can offer, it's clear that this is a decision worth making:
Increase Earnings
Many property owners find that their investment net worth goes up, not down, when they begin paying property management. Property managers do a better job of keeping tenants in every rental space, ensuring they pay their bills, and staying ahead of the management of the building and appliances to prevent big costs when something breaks. You'll find that your monthly income likely goes up and that expenses decrease.
Save Time
Many people get into commercial real estate with the dream of passive income, only to find that managing their investment is a full-time job. A property manager can help you to realize your dream of collecting the rent check every month and not doing much in between. You may not even realize how much time your commercial real estate portfolio is taking up until you have someone to help you manage it.
Stay Compliant with Laws and Regulations
There's a lot of paperwork and fine print that goes into managing commercial property. A small oversight or failure to report something could lead to lawsuits or audits. Property managers know all of the relevant laws in and out so they can not only keep your business compliant, but also look for ways to reduce taxes, expenses and fees as much as possible.
Make Your Investment More Secure Overtime
Property management teams aren't just involved with increasing your earnings today or even this year. They are constantly improving the physical property, the reputation the property has in the community, and the quality of the tenants. You'll find that your commercial property becomes more valuable as time goes on, above and beyond the rate of return that you'd see without a property manager.
Where Should I Find Property Management Near Me?
Ready to turn your commercial real estate investment into passive income? The right property management team can make a big difference in your experience. You need property management that is experienced in your area and able to develop positive relationships with vendors, tenants, and property owners to enable smooth property management as the months go by.
The property management you choose should be experienced in the type of real estate you have, whether in office and retail space, shopping centers, a multi-family living enterprise, or an industrial property. Creek CRE real estate has a combined 30 years of experience in property management OKC Central and throughout the surrounding areas.
We have managed multiple commercial properties in Edmond, Yukon, Norman, Midwest City, Moore, and Stillwater. Contact Creek CRE today to learn what kind of management we can offer for your commercial property to enable you earn more while doing less and remaining compliant with all rules and regulations that apply to commercial real estate.