Sure you can handle your own commercial property, after all you’ve bought it. And you can definitely go about screening potential tenants, collecting the rent, coordinating with maintenance staff, see to tenant complains, balancing the income…(huff huff)! That’s how busy you’ll be (and more) when you manage a commercial real estate. Do yourself a favor, and hire a property management company. Here’s why.
Team of Professional Real Estate Agents
It may sound like we’re tooting our own horn but it’s true. A property management company has a team of professional real estate agents working for them, sometime round the clock for all types of emergencies. These agents are trained, well-versed in real estate management, licensed, and more importantly, eager to take care of your commercial real estate property. While you can tackle some activities, you will not have the professional expertise or license that these people have, required for commercial property management.
Knowledge of Lease Agreement and Other Legal Papers
Yep, that’s the one we’re talking about. Commercial properties are complex to manage because they entail many legal consequences. From simple things like having a solid lease agreement, right down to no-objection or eviction notices, all require legal knowledge to draft them. Since a licensed property management company usually has legal staff or are in touch with attorneys, they know what to do to save you from legal consequences. You might not want to bungle up especially when you’re dealing with companies as tenants.
Access to Network of Tenants
One of the most important things that a commercial property landlord looks for are tenants. A commercial real estate with low tenant occupancy means you’re not maximizing your return on investment. Securing full occupancy is also one of the most difficult tasks, even for a savvy landlord. A property management company can greatly benefit you in that they have a network of sources to get tenants in lesser time. This is because real estate agencies have access to databases like MLS which lists properties for rent across the nation. The listing is exclusive to agents which you, as a landlord, can’t have access to. That’s a chunk of potential tenants lost.
Moreover, if you set financial goals and made them aware of it, your property management company will be able to help you to achieve those goals for you.
While we know you may be adept at managing cleaning staff, and calling the plumber or electrician, commercial property management isl more than that. If your commercial property is for offices then expect a lot of cleaning work to do: garbage, toilets, windows, walls, stairs, reception etc.
Expect a lot of breakdowns due to the high people traffic in all areas of the building from stairs, garage to parking lot, plumbing, electrical wiring, and windows etc. For all of these, you’ll need someone who has access to all types of vendors (and backup vendors) for all types of weather and situations.
Increase Property Valuation
Running commercial real estate in a place like Burbank is not just about collecting rent. It requires short and long term vision. So while you’re collecting good rent, if your property doesn’t increase in value over time, it will beat the purpose of investing in it. A real estate management company can help you evaluate your property from time to time and suggest you measures to improve your property’s value. For example simple recommendations like heat proofing, installing a new lift, creating a rooftop garden or landscaping of your entrance can greatly make a difference. Such professional property appreciation advice will help you secure hire rent as well as price of the property, should you decide to sell it off.
Last but not least is the fact that when you become a commercial property landlord, you might as well think of increasing your investment pool by spending your time in scoping for more properties rather than just managing the one that you just bought.