Why Investors Should Consider Commercial Property Management

commercial-real-estateCommercial real estate is not an easy industry to tackle. The assets are larger not only in size but also in value thus further escalating risks and the work. This is why many investors have sought the help of commercial property managers.

These professionals tackle a lot if not all of the requirements and responsibilities when it comes to owning commercial spaces put up for lease. Among many of the tasks they handle on a day to day basis includes the following.

CHIEF OF COMMUNICATION – Should the tenants have any questions and concerns about the rental, these managers will be the ones to pick up the phone and answer them. They simply make life stress free for investors. No phones buzzing at the dead of night!

TENANT-LANDLORD DISPUTES – Sometimes unlikely disputes happen and not all owners and investors have the time, energy, ability and desire to deal with these. Property managers can handle these troubles in the most professional and legal means possible.

DOCUMENTS – There are a lot of responsibilities and requirements in terms of finance and documentation when one chooses to lease out their assets. This includes taxes returns and income and expense reports to name a few.

EVICTIONS – Bad tenants are hard and tiring to deal with. A manager can stand as the owner’s representative in these cases. They will look into the matter and within the terms allowable by law and as per contract; they will carry on with all the tasks necessary to evict your bad tenants.

MAINTENANCE – Likewise they will ensure that the repairs and maintenance of the assets are done by all parties liable to do so. This avoids any possible dilapidations issues in the future.

RENT – Managing commercial properties for rent is tough business. Collections may sound pleasing but they’re no easy task. This is especially true if one has other business endeavors, a day job or lives somewhere far off. A manager will help you when it comes to rent collections. You don’t have to go to each tenant every month and do it on your own.

TENANTS – Rental vacancies are massive blunders. After all you are putting them up for lease for a reason and that is to get a return on your investment and profits to boot. If vacancies are rampant then this would be hard to achieve. Commercial property managers not only look for tenants but they screen them as well to ensure that you only get the good ones.

Pitfalls to Leasing Out Your Commercial Property Investments

commercial-property-investmentsLeasing out your commercial property investments is one way to garner great returns and a steady income stream but it’s not one without its drawbacks and challenges. Like everything else, landlords and owners can find themselves swamped with a dilemma or two. If you’re not careful enough, you might just find yourself in the same boat.

So what are the pitfalls to leasing out your commercial property investments? Check these out.

Pitfall #1 – Rental Vacancy

It would be awesome if each and every rental unit is filled throughout the calendar year but what if they’re not? Long rental vacancies can signal not only a cash flow issue but also a depreciating asset that does not generate income.

It takes a well-situated, adequately maintained and effectively advertised asset to drive enough demand to fill the commercial properties with lessees.

Pitfall #2 – Bad Tenants

But not every potential tenant means income. Some of them present quite a burden. Let’s not even begin to talk about the losses. That’ll take up an entire day to finish. Bad tenants do more than just hand out delayed payments or no payments at all. They too present other issues such as a poorly maintained asset that’s been damaged beyond repair.

The fix? Make sure to screen tenants too. If you don’t, you’ll get yourself a headache. Filling up your investments with tenants may be a priority but make sure that they are good ones.

Pitfall #3 – Dilapidations

Dilapidation refers to an asset falling into a state of disrepair as by misuse or neglect by the party responsible for its upkeep and care. Part of leasing out commercial spaces includes repair and maintenance responsibilities. These tasks can be divided or assigned either or both to the tenants and the landlord. These must be carefully laid out and discussed ahead of time and put to paper by means of a contract.

An asset that has fallen into a state of disrepair is a huge loss so be sure that you make the responsibilities of all parties clear ahead of time. Do your part and let them do theirs.

Pitfall #4 – Soaring Ongoing Costs

Repair and maintenance requirements come with costs to investors. This is why it is important to opt for commercial property investments that don’t require too much or too high of a cost in such matter. After all, they’re regular expenditures that will be spent for the entire duration of the asset’s useful life.