Commercial real estate provides an excellent investment opportunity for individuals and businesses alike.
Managing a commercial property, on the other hand, is no small task.
Daily operations require marketing, tenant relations and maintenance skills. It also requires substantial knowledge of leasing agreements, employee relations and regulations.
Rather than deal with these complexities on their own, many investors turn to an experienced property manager. Put simply, property management is third-party oversight of a commercial property on behalf of the owner.
Many investors find that property management helps control costs, boost profits and maximize value. Property management clients may include individual investors as well as developers of office buildings, shopping centers, industrial facilities and apartments.
At Commercial One Management, we offer property management services for the Branson and Tri-Lakes area. Whether you’re new to CRE or you need assistance with an existing property, here are the basics of property management.
- Benefits of Property Management
- Types of Property Management
- Responsibilities of Property Management
- Cost of Property Management
- How to Hire the Right Property Manager
What are the Benefits of Property Management?
There are many reasons why CRE investors turn to rental property management companies.
If you have multiple properties in your portfolio, tending to the daily needs of each one can become overwhelming. In addition, you may lack the expertise to handle the various facets of managing properties, like marketing, maintenance and accounting.
By hiring an experienced property manager, you benefit from their specialized knowledge and skillset:
- In-depth knowledge of laws and regulations pertaining to your property
- Ability to handle maintenance and repairs
- Marketing skills for attracting and retaining tenants
- Specialized knowledge of specific categories, such as retail, office or industrial
By handling day-to-day operations for you, your property manager frees you up to engage in other business activities. In many cases, hiring a property manager ends up costing less than attempting to handle all management responsibilities yourself. Many landlords often include management fees in the Common Area Maintenance charges paid by the tenants.
Types of Property Management
For starters, property management services can be customized for different types of properties. Here are a few examples:
- Residential management handles rental properties on behalf of a landlord. Examples include single-family homes for rent, along with apartments, condominiums, townhomes and vacation homes.
- Commercial properties may include office buildings and professional spaces like doctors’ offices or even co-working facilities. The commercial category also includes retail establishments such as malls, gas stations and restaurants, along with hotels and similar public accommodations.
- Industrial property management covers heavy manufacturing such as auto plants and light manufacturing facilities such as food packaging. Warehouses and distribution facilities are also included.
- Special purpose facilities have unique characteristics that require specialized expertise. Examples in this category include theaters, sports arenas, resorts, assisted living communities, schools, universities and places of worship.
Responsibilities of Property Management
Your property manager may handle all operational activities or just a few services, depending on your needs. Successfully running a commercial property requires a number of essential tasks, including:
- Working with tenants: The property manager collects rent on behalf of the owner. In addition, they may handle screening of prospective tenants, negotiating and drafting new lease agreements and renewing existing leases.
- Marketing the property: Attracting new tenants and customers requires a thorough understanding of the business environment and marketplace dynamics. The property manager devises and executes a coherent strategy for attracting the most profitable tenants to the facility.
- Maintenance and repairs: The property management team may include a range of professionals to keep the building and grounds in excellent condition. Services include landscaping, plumbing, roofing and janitorial service. A good property manager will schedule preventive maintenance, recommend facility upgrades as needed, and promptly handle emergency repairs.
- Financial responsibilities: The property manager must develop a budget and monitor expenses and revenues meticulously. They handle accounting, taxes and other expenses, and maintain accurate financial records on behalf of the owner.
- Legal requirements: Property managers must possess a thorough knowledge of all applicable laws and regulations at the local, state, and federal levels. Many even keep a lawyer on retainer to ensure full compliance.
Cost of Property Management
Property managers typically earn revenue by charging a percentage of rental payments. They may also charge various fees for specific services. For example, some will charge a fee for signing new tenants or renewing existing tenants. Others will charge a markup to cover maintenance or advertising costs.
Factors influencing property management costs include your location, tenant quality, type of property and services included in the management agreement.
How to Hire the Right Property Manager
There are several criteria you’ll want to keep in mind when choosing a property management company to handle your investment.
- Experience: Look for someone with a track record of managing the types of properties you own. They should also have thorough knowledge of the geographic areas where your properties are located.
- Company strength: Research the firm’s longevity, stability and staff turnover rates.
- Reviews: Seek out the opinions of current and former clients. Read online reviews for the company’s strengths and weaknesses.
- Credentials: Most states require property managers to be licensed, so verify that the one you choose has the proper credentials. Property managers can also earn professional certification as an Accredited Commercial Manager through the Institute of Real Estate Management.
- Professionalism: Your property manager is your face to tenants and customers, so you need someone who’ll make a good impression. The individual who handles your property should have honesty, integrity, and good people skills.
Learn More About Property Management in Branson
Many commercial real estate firms also offer property management services. At Commercial One Brokers, we have over 60 years of combined experience in the Branson and Tri-Lakes area. Our clients depend on us for unparalleled service, from maintenance and repair to marketing and tenant relations.
If you need dependable property management service, give us a call at 417-334-3149 or contact us online at any time.