Things I Have Learned About Commercial and Retail Property Management

Commercial property management is perhaps the busiest and most intense part of the property industry. The knowledge that the property manager brings to the task is significant and special. Putting it quite simply, these people work very hard and should be carefully chosen for the buildings they manage.

Are the best managers for the role sourced elsewhere or are they allowed to rise through the ranks and other roles in the office? The answer is probably both. Importantly the person chosen for the role has to handle investment strategies for the landlord and occupancy issues for the tenants. This requires solid intelligence and analytical skills.

Retail property is even more advanced on the skill level scale. So much damage can be done to a property if the manager is underskilled or not well supported. All this requires a reasonable fee base of course. If the management fees are a recoverable item in a lease then it is a no brainer for the landlord to chose the best people to manage their property.

Low fees for property management produce poor levels of control in the property. The landlord and the tenants suffer.

It is very important that the bosses and proprietors of real estate businesses choose managers carefully. A well selected person will do the following for the real estate business:

1. Stabilise the property portfolio so cash flow is optimised


2. Attract more property tenants to the building when vacancy is pending


3. Encourage landlords to grow their property portfolio into diverse and well performing property


4. Provide a diverse commission fee base from well managed property including lease fees, rent review fees, and lease options


5. Minimise the vacancy factors for landlords in times of property growth and or pressure


6. Optimise the performance of the building outgoings in parity with the trends of the market


7. Build a better business for the real estate agent proprietor


8. Help the landlord build a better property income base


9. Provide a building business plan that matches the targets of the property investor and the investment lifecycle that they require


10. A good property management portfolio is a significant source of saleable listings in the future.

So a commercial property manager, is an essential part of the professional commercial real estate business. I would even go so far as to say that the best salespeople were grounded in the industry from a base of commercial property management.

Yes the mindset of a property manager is totally different to that of a salesperson, however the knowledge that comes from the role is high and relevant.

The management job provides real experience in legal, marketing, negotiation, lease structures, outgoings management, and property performance. Salespeople do not normally get that diversity as they move through their career.

The mindset required by a property manager is one of the diligence's to the daily management task, accuracy in financial analysis, excellent communication skills, and dedication to the landlords plans and targets. When a landlord is well served, the manager brings stability to the cash flow of real estate business. Extra commissions are possible though leasing, lease renewals, and rent review negotiations. The property manager also needs to be well versed in the negotiations and elements surrounding lease occupancy and enforcement relative to each property.

If you need to find a commercial property manager for your real estate business, select the person that brings a real future to the portfolio and can strengthen the relationships with your landlords. A commercial real estate portfolio can then grow from the skills of the property management team.

Hiring a Commercial Property Manager or Management Company

Finding and hiring dependable management to oversee routine jobs associated with residential real estate investment property requires that you as the owner make a thorough assessment of duties, responsibilities and necessary services you will need.

Management is the point of contact with the tenants that represent your revenue. As a business investor you will want to protect your investment and be represented to your tenants as a caring owner that cares about your property.

It is especially important that a competent well qualified individual or professional management company reflect your standards as the owner as well as protects your property and your reputation. You can choose to hire larger national companies that specialize in managing commercial property, or a local property manager to live on the premises.

When hiring a company make an assessment of their capacity to oversee legal obligations to confirm if the investment is in adherence to the applicable laws of the state or country in which it is located. A manager or company must act as a mediator between renters and owners to communicate and carry out complaints, repairs and maintenance.

Professional property managers should be able to take on the important responsibilities of collecting rent, security deposits and have the ability to manage income and expenditures so that your realty business remains profitable. Not keeping accurate records can result in costly evictions and damage to your property by a disgruntled tenant.

Some investors allow the current tenants to continue to occupy the property and are notified of a change in through point of contact notices to advise them of a change in management; others may purchase an empty building and hire a manager or management company to screen potential tenants.

A property evaluation will be necessary to collect information about the current or future tenants and the operational services. An evaluation will give you a complete picture of the location, the surrounding area as well the amenities that will make your property a lucrative return on your investment

A commercial property investor with many properties to manage will want to hire a manager for one property location to supervise the day to day activities. The investor with many properties, a residential property management company with experience may be a better choice.

Residential managers can perform a variety of duties in person on behalf of the owner such as maintenance and preparing empty units for occupancy. Ongoing repairs and upkeep for units, laundry facilities, trash disposal, secure access and monitoring receive an immediate response when the manager lives on the premises.

Residential property management companies do not provide all of the same services that an on-site manager may perform. Routine tasks not performed are paying property taxes, rental property insurance, property registrations with local municipalities or government entities.

Landscaping and safety issues can be addressed by either residential managers or property management companies. Contact with outside contractors for structural repairs of damages with the owner's authorization. Advertisements for the vacant units, screening of potential tenants, keying or changing the locks, carpet cleaning and painting are responsibilities you as the owner can leave up to the residential property manager can perform on your behalf.

Property managers can prepare monthly reports to their clients. These detailed statements should include paid expenses, deposited funds, and other money transaction.

Comparing Property Management Quotes

If you are searching for a property management company or an independent property manager make sure that you compare quotes. This will help you to get the best deal possible for high quality and reliable property management.

What Will a Property Management Company Do For You?

Management companies make life easier on the landlord by acting as the liaison between the tenant and the property owner. They collect rent, take care of maintenance problems, find tenants and handle evictions. In some cases they also handle property acquisitions, construction, repair and maintenance. They provide these services in exchange for a fee which is often a percentage of the monthly rent and can range anywhere from 3-10%. In addition to this standard fee some companies also charge additional fees repairs, maintenance and commissions. Comparing rates is the only way to find a company that will offer service and experience at a reasonable rate.

What Will You Still Need to Handle?

Even with a manager you will still need to handle some property issues on your own. Knowing what your responsibilities are is critical if you want to avoid legal troubles with your properties. Here are a few responsibilities that you need to make sure that you handle for each of your properties.

-Property Tax: You will still need to pay your property tax for any properties that you hold. This is typically paid yearly. Find out what your property tax obligations are and make sure that you pay them each month.

-Mortgage: If you still owe money on your property's mortgage you will still need to attend to this payment every month.

- Repairs: Many property owners delegate their repair responsibilities to their managers. This will save you time, but make sure that you still oversee the repairs. If the property manager doesn't handle repairs properly it can drive down the amount that you will be able to charge for rent. On the other hand if they make costly or unneeded repairs you might end up spending all of your profits on repair and lose money. If you do

delegate this responsibility make sure that you oversee and know the state of repair that each of your properties are in.

- Screening Tenants: If a bad tenant moves into your property it can cost a lot to get them out plus they can end up leaving your property in a state of disrepair which can cost a fortune. For this reason many property owners handle tenant screening on their own. If you do delegate this responsibility make sure that you provide your property management company with specific requirements and criteria before a tenant can move in.

- Approve Big Repairs- You will also need to authorize major and expensive repairs. If your property management company handles repairs you will still need to authorize major repairs such as a roof repair or repainting the unit.

To get a great property management quote call around and find out what several property management companies will charge for their services. Don't just ask about price, but also consider what services are included in the quoted rate. You should also pay attention to their level of experience, expertise and reputation.