The best reason to invest in commercial property is the earning potential. In fact, many of the world’s billionaires made their fortune in real estate. But not all real estate is created equal. Commercial properties generally have an annual return off the purchase price between 7 and 10 percent, depending on the area. Not bad!
While the income opportunity of owning a commercial property can be a strong motivator, that approach won’t serve you well or your tenants, at least not in the long run. The interpersonal aspect can’t be overstated. You need to treat it as more than a business transaction. Here’s how to do that:
1. Prioritize customer service. Prompt response to maintenance issues is paramount to providing a great tenant experience. That means you need to be careful about who you hire for contract work. You may be a good landlord, but aligning yourself with a vendor who drops the ball can cost you in the end. Remember that “cheap” can come back to bite you in the form of leases not being renewed, etc. Plus, there can be legal ramifications. Yowsa!
In general, it is best to pay a little extra to keep reliable commercial tenants. Treat them like investments, not like inconveniences, and they will be more likely to renew their leases.
2. Prioritize safety. Keep the property safe day and night. When there are dimly lit areas, slipping hazards, fire hazards, and other cases of neglect, a lawsuit is just waiting to happen. Make sure that you do as much as you can to make the property safe, so tenants feel like you have their best interest in mind.
Additionally, maintain compliance with the Americans with Disabilities Act and the International Building Code. To be compliant with regulations, the facility will require steps with handrails and wheelchair ramps for any doors that are above ground level. Each commercial area of the building must be accessible to everyone, including those who may not be mobile. In order to accommodate people of all abilities, you have to take a step back and think about how they will interact with your building. How easily can they enter and exit? Is the restroom accessible?
3. Be open and honest. Landlords should take great care to provide honest, up-to-date information, and in return, the tenants will be more likely to be receptive to compromise later. This applies to matters concerning prices and charges. While no one likes to talk about money, being up front about any changes — and communicating them with ample notice — can pay dividends in the future.
4. Stay engaged. Some landlords prefer to be hands off, especially when they have multiple properties to manage. They may gripe about having to to make minimal repairs to ensure the safety of a facility. But the reality is that you’re obliged to hold up your end of the bargain. Consider the true cost of doing business, such as annual inspections.
No matter where you’re located, elements like wind, water, and sun exposure can take a toll on roofing, structural integrity, parking structures, walkways, and more. In order to protect your investment, schedule a thorough inspection of each property you own and zero in on everything from he HVAC unit to the electrical systems.
Making the tenant feel important is significant and doesn’t go unnoticed. Taking consistent steps to constantly improve the property not only will keep your resale values high, but allow you a better long-term relationship with your tenant. And happy tenants can mean more referrals and lower vacancy rates.
5. Ask for feedback. You can’t improve unless you know what’s lacking. Solicit input from tenants via surveys and reviews. There’s a plethora of online tools available at your disposal to manage such activities — and do so with anonymity in mind. You can offer a gift card drawing as an incentive for feedback. All people who respond would be entered into the drawing.
Start with simple questions, such as:
- Are you pleased with your office space?
- Is maintenance aligning with your expectations?
- Would you like to improve anything about the facility?
6. Look for expert help. If mounting pressure and responsibility is weighing on you, know that you don’t have to go it alone. Our property management company is well equipped to manage your tenants and your commercial property from start to finish! These services include property maintenance and compliance, retail vacancy marketing and tenant placement, rent collection and accounting, on-call property managers, web-based portals for property owners and tenants, and all other commercial rental management services.
In other words, we specialize in full-service property solutions. We have three goals for our commercial property clients: maximize profitability, keep operating expenses low without sacrificing tenant satisfaction and build value by protecting your investment. You’re in capable hands! Contact our office today to find out more! https://www.propertymanagementinc.com/
