Purchasing a commercial property is a big decision. It is a large purchase and needs to be managed well for the investment to be worth it for you. How a commercial property is managed can affect the value of the investment. A property can increase in value significantly just from being well managed, and of course the opposite is true as well.
Here Are Some Tips For Managing Your Property Effectively.
1. Get Educated
It is important to educate yourself before even purchasing a property to begin with. There are many real estate investing education options to help you make the right purchase decisions. With the proper education, you will understand the market, the different types of commercial properties and how to properly manage each type.
Without the proper real estate coaching, jumping into a commercial property can be extremely overwhelming. There is so much to understand about the industry and by learning as you go, your lack of knowledge can easily show and scare off potential tenants.
There are, of course, success stories of people that bought commercial property without educating themselves first. However, it is highly recommended that you take the time to invest in yourself and your own education before making a large investment in commercial property.
2. Make sure your tenants are happy!
Communicate with your tenants! Your tenants are your customers. Treat them accordingly! You want to avoid turnover of your tenants as much as possible. With commercial property, it is expensive and can take a long time to find a replacement tenant. If your tenants aren’t happy, they will leave at the first chance they get. Then you will be left with a vacant property and no income coming in. You will also most likely have to put in some capital to keep the building in leasable condition. You want to avoid vacancy as much as possible!
Leave a good first impression. When your tenants first move in, quickly deal with any issues or concerns they may have with the space (that are your responsibility). This goes a long way in making your tenants feel welcome and at home in the building. It also makes them happy to keep renting from you for years!
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3. Have a good lease agreement
This is one of the most important parts of being a landlord. Your lease agreement is all that is covering you in the event things take a turn for the worse. Ensure you seek legal help in drafting a legally binding lease and be sure that it covers every possible scenario that could come up between you and your tenants.
The lease needs to protect you and your property; however, it can’t be too one sided or you will never get a tenant to agree to the terms of the lease! Make sure that it is still fair for your tenants.
Once you find a tenant and they sign the lease, make sure that you follow through on all the provisions of the lease that are your responsibility.
4. Hire a Commercial Property Manager
Many landlords want to save money and try to handle the property management themselves. But for a lot of property owners, this is a big mistake. There are a lot of trends in the market that a manager needs to be familiar with and property owners are often not up to date with these trends. This can make a property less attractive to potential tenants, causing longer vacancy and bigger financial loss.
It is often worth it to hire a professional, someone whose job it is to be familiar with what tenants are looking for, and how to market the property to these tenants.
5. Keep up with repairs and maintenance
This ties in with making sure your tenants are happy. When something goes wrong at your property, make sure that you are having it looked after right away.
Commercial property is like any other asset. Occasionally it will break, and you will need to go repair it or hire someone to repair it. By keeping up with maintenance, you reduce the chances of having a large repair bill down the road. However, you need to find the balance between spending too much money on preventative maintenance on things that aren’t worth doing, and not doing enough maintenance causing an expensive fix later.
Follow these few tips, and your investment will have a much better chance of being successful for you!
Lane Genik offers a wide range of real estate coaching programs and services at REI Nation– from individual coaching, to online courses and tools. Heis a real estate investor who has a passion to help people start or grow their own real estate investing career.