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Should you be your own commercial property manager or outsource? That is the question. Now you’ve parted with hard earned dollars and possibly taken on a pile of new debt to buy that commercial investment property, how can you ensure you get the best return? |
If you talk to a commercial property manager, the issue is clear cut. A good commercial property manager will;
- Save you money through reducing your outgoings & ensuring your property is maintained to the highest standards
- Increase the value of your asset by identifying extra income opportunities and ways to increase your lettable area
- A commercial property manager will negotiate terms and resolve any issues with tenants within the parameters of the law
- Retain your existing tenants and find quality tenants when needed
- Negotiate and advise you on structuring new leases that are in your best interest
- Keep your property compliant – maintain essential fire services & safety equipment to legislative standards
- Organise site specific procedures manuals that include scheduled maintenance and evacuation plans
- Your commercial property manager should have knowledge of property law, investment analysis and other related skills.
- A professional commercial property manager knows there is a careful balance to ensure a property remains attractive to the market whilst maximising investment returns.
Some hands-on-owners may rationalise that they are the best person for the job as the property is nearby so they can ‘keep an eye on it’ and how difficult can collecting rent be? However, keeping an eye on a commercial property and collecting rent are only small aspects of the role of a good commercial property manager.
At an average cost of between 3 to 7 per cent of the collected income, hands-on owners may feel this cuts too deeply into their return. But, a hands-off investor may consider 3 to 7 per cent a bargain to keep their involvement at arm’s length and have a professional team looking after their investment.
Some of the pitfalls for the owner commercial property manager area;
- Not being completely up to date with the appropriate legislation in each state for example: The Retail Act, you run the risk of putting yourself in a position of liability.
- The owner commercial property manager is often not trained as a negotiator, and experienced in finding the best solution for all parties.
- Owners and tenants dealing with each other can result in some difficult situations, especially when the rent is due to be increased or the tenants business is struggling. Typically, you have two sets of emotions; the owner is emotional because often it’s one of their biggest investments, the tenant is emotional as their business may be in trouble.
Your experienced commercial property manager can advise you before you even buy the property on important aspects that you may not have picked up on, such as, whether the outgoings of the property are within industry benchmarks and that you are aware of future costs or upgrades going forward along with important market data that may be relevant should the property become vacant.
Employ a commercial property manager and you’ll be well on your way to ensuring your investment property performs well, keeping headaches to a minimum.
To speak with an experienced commercial property manager call us on 1300 664 373.
