‘Must-Haves’ for Commercial Property Owners

‘Must-Haves’ in connection with commercial real estate owners usually refer to 3 things: attracting good business tenants, keeping those good business tenants, encouraging those good business tenants to stay for a long, long time – all the things a good commercial property management company does. What this translates into is making your investment in the commercial property pay off and in a relatively easy way. To enable this you need to put the pieces in place to find and keep good business tenants.

Amenities Employees Appreciate: Choose property close to amenities that workers value, such as an easy or convenient way to get to work. Buildings close to railway stations, bus routes, car parks are more attractive. If there are restaurants, stores, gyms or parks close by, it’s a major bonus. And don’t forget the amenities at the building itself that can drive satisfaction such as  parking for cars, bicycles, and e-vehicles, as well as clean, modern bathrooms and kitchens.  

A Flexible Commercial Space: You want your space to appeal to a wide range of businesses, so the more flexible it is, the more attractive it will be to more people. If you can accommodate a segmented layout, or an open plan you can appeal to a broader market of business tenants. Don’t be afraid to ‘repurpose’ your building or parts of it. As a business tenant evolves, there’s a good chance you can rework the space to enable their changes and keep them on board for the long term you desire.

The Right Attraction Factors: What type of tenants do you want? Do you have what they want? If it’s retail, your facility must be in a high traffic area with lots of street frontage and adequate parking for employees and customers. Inside should be a supportive infrastructure including phone system, high speed internet, and data lines. On top of that should be modern amenities like energy-efficient heating and air conditioning and wall-to-wall carpeting. If your target tenants are warehouse or industrial, your property needs truck access and to be close to high capacity urban roads and/or railway freight interchanges. Inside, you’ll need high ceilings, concrete platforms for heavy loads, and suitable fire systems. Both types of tenants will also need adequate power supplies and appropriate security systems.

Good Looks – Because They Do Matter: How does your facility pan out in the looks department? When a prospective tenant stands outside the front of your building what is the first impression they receive? No business owner wants to rent a place their customers don’t want to enter. There are several things that can render a building or property unattractive to potential tenants: blotchy outer paint job, broken bricks or ugly architecture, little, if any, natural light, poor street-entry, not enough lobby space, drab, worn carpet – dirty faded walls. Change the ones you can asap!

Incorporated Mobility. More business owners ‘live’ on their phones, and you need to accommodate them. One key way to do this is with a mobile optimized website and a mobile optimized team. A ‘smart’ website can include: on-line applications with ways for potential tenants to upload documents from their phones; secure online payment options that work on mobile devices; the ability to send payments to property owners electronically, and post monthly statements to a portal to be easily accessed anywhere at any time; enable online maintenance requests – which can be immediately dispatched to the appropriate personnel and tracked online. Make your team, a ‘smart’ team, with leasing, maintenance, and property management all connected via mobile phone and tablets.

The Best Real Estate Property Management Company: Let the experts handle the hard parts, the parts they’re experienced at, knowledgeable about, and effective and efficient at dealing with on a day-to-day basis. In the long run, a good commercial property management company will save you money, keep your property maintained, handle all tenant problems, and ensure your investment is paying off. You just monitor your monthly reports and bank account and enjoy your peace of mind.

Commercial properties provide a workspace rather than a living space – but this workspace involves people, who must be comfortable and productive. Whether your real estate property includes office buildings, strip malls, restaurants, warehouses or trucking companies – you must appeal to the people involved. Incorporate some or all of the ‘must-haves’ we’ve noted and you’ll go a long way toward attracting and keeping the right kind of long term business tenants you want.

Good Communication Skills are Important for Property Managers

Communication is the key to success in almost any field, but it’s especially critical when it comes to effective real estate property management. You see, this job is all about people – the people you rent to, the people you answer to, and the many, many people you interact with to keep your properties maintained and repaired. A property manager is actually the nexus of communication for residential property management – everything flows through you.

It’s not a job for everyone. You need to be able to talk to people from every culture, from all walks of life, and with every kind of personality. You’ll find yourself explaining a repair cost to an owner, standing in front of a judge regarding an eviction notice, negotiating with maintenance and repair people, and listening carefully to a tenant who may be frustrated, crying, or downright angry. And you must do this while maintaining a calm and professional manner. If you speak more than one language, it’s a major plus.

Here are some of the skills a property manager needs to enable good communication:

Be a good listener. Don’t be thinking about what else you need to do, or thinking ahead to when you can take that lunch break you missed 2 hours ago - just listen. This person needs to be heard, and needs to ‘feel’ heard.

Understand what is being said from the other person’s point of view. Learn and empathize with how it impacts the person giving you the information.

Figure out what action must be taken based on what you just heard and understood. If you’re unsure what as to what action is needed, ask questions until it is clear to you.

Express the action needed to those who must deal with the issue, whether it be tenants, repair or maintenance people, or the owners. Tell them in terms they’ll understand so they feel confident and comfortable doing what needs to be done. Be precise and be clear. Give them all the information they need as well as a set time line.

Good communication for real estate property management, however means more than just listening and talking, it also encompasses written letters, emails and texts.

With owners, determine what form of communication they prefer, what information they want and how they want it, as well as how often. Let them know when any issues arise with the property and how you plan to handle them. They need, and deserve, honest and timely communications. With tenants, emails and texts are effective for giving information and updates as they can be printed, or referred back to for clarification. Flyers are also helpful in elevators, laundry rooms or common areas.

At all times and for everyone, answer the phone as soon as possible. There is nothing more reassuring than a friendly, helpful voice on the other end of the line. Respond to emails as quickly as you can, or set a time every day to deal with them. If you’re having repairs done, send out short updates so all concerned know you’re taking care of things. Be consistent in your communications – so owners and tenants know what to expect from you.

For tenants and owners alike, clear, reliable communication with their property manager offers a feeling of security. Owners know their investment is being handled appropriately, tenants are comfortable contacting you and feel safe in the space they call their own. Happy tenants translate into long-term tenants and that in turn means happy owners! So as you can see, when it comes to residential property management, success depends on a property manager with good communication skills!

Tips for Property Managers

Property managers have a responsibility to their tenants. They have a duty to make sure that a tenant is comfortable throughout their stay. However, some property owners treat their lessees poorly, these lead to conflicts and complaints. The way you treat your tenants and manage your property plays an important role in keeping the room or house you rent profitable.

If you are a bad owner, word of mouth of how poorly you run your property will spread, limiting or eliminating your prospects.

These tips will help you become a better property manager.

Address Problems Immediately

Conflict between property owner and tenant may stem from small problems such as leaky plumbing, creaky floors and other minor details. Show your tenants that you care about their comfort and well-being by addressing these problems as soon as they happen. In any industry, customer service will mean the difference between a satisfied and dissatisfied client.

Do not wait until a problem arises; always perform regular maintenance to prevent leaky faucets, loss of insulation, air leaks, faulty locks and others. Make replacements when you think that you need to do it. Inspect the room or property regularly to determine if you need to fix or replace anything.

Make Renovations and Improvements

The improvements you make on your property will increase its value. Sprucing up the kitchen or living room will go a long way in attracting and keeping quality tenants. You do not need to make a full renovation, sometimes it just takes a fresh coat of paint or additional pieces of furniture to liven up a dreary apartment. The renovations or additions you make will also improve the quality of your tenant’s stay.

Communication

Communication is a vital skill when it comes to dealing with tenants. You need to learn how to mix friendliness with firmness, especially when you start making demands. Rapport with a tenant will keep you on good terms with them. An open line of communication with your tenants will make it easier to identify their needs and wants, or find a compromise to prevent conflicts.

Go the Extra Mile

Going the extra mile may be as simple as keeping the surroundings clean or making renovations without additional charges. This shows how you care about your tenants; customer service will enable you to develop rapport. Doing more for your tenants will keep them satisfied with you as their property owner.

The way property owners manage their property and deal with tenants may either take your business to the next level or lead to its closure. Focus on the needs of your tenants and make them comfortable, as long as you do this, they will want you as their manager.

Residential Investment Tips for First Time Buyers

Hundreds of thousands of people across North America are happily living off money made from investment properties. If you do it correctly you can join them. But it’s much more complicated than just buying a building. There’s a lot you need to know and do before you take the plunge. You also need to understand a bit about the dark side of residential property management – but we’ll point out a great way to handle that!

Don’t rush into it. You need to go into property investment with your eyes open – knowing what the potential gains and risks are. That means doing research, as well as getting advice and help from professional property experts. Do your research in person as well as on the internet. Talk to anyone you know who owns investment property. Sit down with them to get a first-hand look at what it really entails, the good, the bad, and the ugly. As for those property experts, they should include an independent mortgage broker, and a real estate agent with investment experience.

You’re not buying a property, you’re buying a business. And this isn’t always the easiest paradigm shift to handle. It’s not simply a case of sitting back and watching the money roll in. You have responsibilities to shoulder and legal aspects to understand. You need to factor in municipal rates, interest rates, and operating costs like property insurance and taxes. A good way to handle this is to draw up a business plan with all the details you should consider, and set realistic goals. Are you willing to handle the day to day details of an investment property? If not, hire a good residential property management company. It’ll save you money - and headaches - in the long run.

Look for an ‘income stream’ instead of capital growth. Before you buy, you need to work out – and understand – the ‘yield’ of a property. Yield is the actual income you expect to receive – the rental income relative to the property’s value. To figure out the yield: total up all property costs (include closing fees, renovation fees, etc.). Take the estimated annual rent amount and divide it by the cost of the property. Multiply this by one hundred for a percentage – and this is your net rental yield. Balance this annual ‘yield’ against the price your property could be sold for in the next five to 10 years. Now you can see if the property is worth investing in.

Buy Where Renters Want to Live. You may get a great deal for a property in a small town, or in what appears to be a good area – but if it turns out no-one wants to live there, you’re in trouble. When scouting around for a rental property, look for areas of a city that show signs of growth and economic sustainability. Find out which areas have jobs available and people moving there for those jobs. Is there a school nearby, is transit handy? If you’re not familiar enough with all the different parts of your city, hire a real estate agent who’s experienced with investment needs.

Understand Your Monthly Costs. There are more than you may have realized when you first decided to buy an investment property. Those costs include: mortgage payments, interest and property taxes, maintenance costs, possibly garbage pick-up, water usage, or strata fees. You should also have an emergency fund to take care of unexpected repairs or vacancies. Those monthly costs may also include a property manager to handle the business end of things.

A Property Manager is Your Best Friend. Good property managers are worth their weight in gold! They’ll deal with the many day-to-day details of running your property and handle the dark side of rentals - like the call in the wee hours of the morning when a water pipe breaks, and dealing with the ‘tenant from hell’ who just doesn’t get it! – all for a small monthly fee. They’re proven to generate higher rent incomes, have connections in enough industries to handle any situation, and understand the applicable legalities. Shop around when it comes to choosing your real estate property management. And ask around. People are more than happy to recommend a good property manager.

If you’re considering buying an investment property, and hadn’t really looked into it too much, your head might be spinning right now! But if you are serious about this, you can now move forward in the right way, with the right people, to make this dream a successful reality.

Use Clauses & Exclusives – Know What They Mean

Finalizing a corporate lease in a multi-use facility such as a shopping mall or office building or complex entails more than deciding on the rent amount and length of tenancy. One area of importance to both property management people and the tenant are the ‘use clauses’ and ‘exclusive clauses’ within the lease. These clauses define the use of the space. Landlords prefer well-defined clauses whereas most tenants prefer clauses open to wide interpretation. The key to an acceptable lease is finding a balance whereby both the landlord and tenant feel their own interests are appreciated and safeguarded. 

‘Use clauses’ and ‘exclusive clauses’ set the limits for a tenant’s activities within their business rental space. The two clauses typically work together and come in many variations.

‘Use clauses’ tell a tenant what they can do, or what they can’t do. As well, these clauses can be broad in merely noting the type of business conducted, or they can be constricting in specifying the products or services allowed for sale. A permissive ‘use clause’ specifically lists what you can do, thus any services not listed are not allowed. For example, a postal outlet might want to expand its services to faxes and photocopying which seems like a logical progression. However, if those services are not listed, they’re off limits. A restrictive ‘use clause’ specifies what you cannot do. You may not be allowed to sell food in your business space. You can, however, sell books, or sportswear or anything that is not written down. In many cases you’ll find that a restrictive ‘use clause’ is connected to an exclusive ‘use clause’.

Not surprisingly, tenants prefer a broad use clause such as, ‘any lawful use’ or ‘any lawful retail use’. This openness allows them to update their business when necessary to keep up with an evolving marketplace.  

‘Exclusive use’ or ‘Exclusive’ clauses may apply to a specific geographic area and prevent a landlord from leasing to a new tenant who has the same business as an existing tenant. It can also ensure a landlord leases only to specific types of tenants. If you include an ‘exclusive clause’, make sure you also take into account reparation in case of a breach. This may include things like reduced rent, a lease term reduction, and a set amount of money for damages.

Who wants ‘exclusive clauses’? A major or ‘anchor’ tenant at a shopping mall wants to maintain exclusivity for their products or service. A group of dentists with a large practice may ask the landlord of their office complex to agree to rent only to compatible tenants like a denturist, a pharmacy, or a rental service for home care equipment.

When you’re using ‘use clauses’ or ‘exclusive clauses’, make sure that terms are clearly defined. For example, what exactly is meant by ‘groceries’? Does this just apply to food, or does this include paper products, soap, and diapers? What makes up a ‘sales area’? Is this the shelving space where products are displayed, or does it include the store aisles, and the check-out area? Taking the time to specify now, can save time and money for property management in a court case later.

Having a ‘use clause’ in a lease is no guarantee the tenant will abide by it. Businesses change - they may need to evolve or expand to keep up with changing customer demands. So it’s a good idea for property managers to regularly audit their tenants to make sure they’re compliant. A landlord during the due diligence period should review existing leases and ensure their new tenants are abiding by the terms that have been set out.

When it comes down to incorporating ‘use clause’s and ‘exclusive clauses’, commercial property management companies must consider many different issues in every lease. And to be honest, it’s not getting any easier. Today many businesses have expanded their products and services beyond the usual accepted parameters. Some grocery stores now have a pharmacy and a bank outlet as well as a wine kiosk. Corner drugstores sell coffee, food, stamps, and the latest electronics. It all lands on the shoulders of landlords and their lawyers, who must face the pressure this disturbing trend adds to the challenges of negotiating and drafting an acceptable and enforceable lease.

Unconventional Uses of Commercial Property Space

Times are tough in a lot of cities these days when it comes to keeping commercial space rented. There are vacant buildings, and blank store spaces in malls and shopping plazas, looking like so many empty promises. In every case, the emptiness impacts not only commercial property management, but also the neighborhood or shopping space these vacancies reside in – and not in a positive way.

The good news is that a lot of creative minds are finding new ways to utilize empty commercial space no matter where it is, or how big. Here are some innovative ideas on giving empty spaces new and profitable identities.

If you don’t mind putting in a bit of effort and money into renovation, building conversions are a good way to repurpose old warehouses. Section that space into separate offices or retail spaces, and rent to a number of different smaller clients, instead of one big client. One owner converted a distribution warehouse into a courthouse and parking garage. An old warehouse with refrigeration and freezer facilities is now used by a transport company which specializes in temperature-controlled time sensitive food transportation. In another case, a manufacturing plant found new life as a church and a school.

Turns out empty big box retail stores are a perfect location for expansions from community colleges or universities. The locations have good access to roads, plenty of parking, and can easily be changed into flexible classroom space.

Vocational schools fit well into shopping malls. Massage schools as well as make-up and hair dressing schools complement the shopping atmosphere. As well as paying the rent, there’s an influx of people coming in who who’ll end up frequenting the stores and food court.

Vacant mall spaces are also ideal for those not yet of school age. That’s why you’ll find daycares and preschool spaces popping up in local malls and shopping centers. Parents can pick up their children and conveniently get their shopping done in one trip.

Another trend sees government offices moving into shopping malls, mainly in the mall wings which are usually difficult spaces to rent. It’s ideal due to the availability of parking, public transportation, and the shopping space itself being a natural community focal point.

Medical clinics are finding homes in shopping centers, malls, and shopping plazas. Everything from emergency clinics to dialysis centers. Being in a retail location gives them visibility, provides easy access and they have all the parking spaces they need. If you’re considering this, make sure property management checks out the exclusion clauses of the space.

When long-term solutions are not readily available, inject some short-term marketing creativity to help pay the bills, brighten the space, and make these commercial spaces more enticing.

Pop-ups are becoming increasingly popular and are no longer limited to holiday sales. There are pop-up restaurants, and pop-up shops with every kind of product or service you can imagine. A successful online business may want a temporary tangible retail space for a special promotion –and end up as a viable tenant.

In between those short-term and long term tenants – fill that ugly gap with the help of local artists who’d love somewhere to display their art. It brightens up the space, generates interest, and may get someone thinking that this is not a bad place to locate a business! Whether or not you charge, it’s a much nicer venue for commercial property management people to show to a potential renter!

Long-term, short-term, temporary - it’s better to have someone in that retail space than to leave it bleak and empty. So, shake up those creative marketing juices of yours and try out some new ideas!

Maximize the Profit of Your Property By Using Some Common Sense Suggestions

When you have an income property, you want to get as much money as you can out of it. So it pays off to make the extra effort to be creative or to be diligent – and in some cases, come up with an initial investment to get things rolling. Whether you deal with residential property management or corporate property management many of these suggestions can help you to get more money coming in.

RENT OUT UNUSED STORAGE/PARKING SPACE: If it’s in a warehouse and it’s a large space, section it off and rent it out for separate smaller storage spaces – if it’s a smaller space, rent it out as is for storage. If you have a huge unused parking space, advertise monthly parking in specific sections, painting the lines for those areas differently. If the storage space or garage space is at a residential property and is not being used by tenants, rent it out to non-tenants. Is there a business nearby that could use more parking or storage?   

TURN WALLS/FENCES INTO ADVERTISING SPACE: Make that empty wall space or fence into an advertising mecca by renting it out to local businesses. It can be as simple as hanging a banner or as detailed as having a professional painter make that space into a marketing mural. Use as many walls or fence lengths as you’re able to. It’ll brighten up a barren industrial property, and can bring in hundreds of dollars every month.

ADD LAUNDRY FACILITIES:  If you’re looking to attract quality tenants, give them what they want: in-unit laundry. It costs a bit at the beginning, but will pay off in the long run as you can raise the rents, enjoy faster rentals, and get those quality long-term tenants you always wanted. They’re also a good incentive. Offer the laundry facilities only to those who sign a 2-year lease instead of a 1-year lease – the convenience may even keep that tenant beyond the 2-year commitment.

ADD/UPGRADE COIN-OPERATED LAUNDRY FACILITIES: If you haven’t got laundry facilities on-site for a residential property, then install them – even if it’s just one washer and one dryer for a small property. No-one likes piling their dirty laundry into a car and going out to a laundromat, if they can drop them off downstairs, then just conveniently pick them up a hour or so later. If you already have a laundry room, make sure it’s regularly cleaned and maintained. In both cases, a change machine is a welcome addition!

BUY A KEYMAKER – Depending on the size of your property or properties, you can save a fortune making your own keys. For the initial investment of a key maker, and ‘No Duplication’ key blanks, you’ll be able to replace any key at any time – even Sunday night after a tenant’s keys just hit the elevator shaft floor! You can charge for replacement keys – say $5 each - and never worry when a tenant doesn’t turn in their keys. Just buy a new lock and make the extra keys yourself.

INSTALL VENDING MACHINES – Could be coffee, soft drinks, chocolate bars, candy, sandwiches – you choose what would be most appropriate for your space. In a factory or office building, all would be probably be welcome in a lunchroom. In a residential setting, they might be found in a laundry room or recreation room or even in back hallway to the parking lot. A workout room would be a great setting for a fruit juice dispenser.  All translate into more income for you.

Making extra money in some of these ways does come with an initial investment, but if properly handled and maintained, can be constant additional revenue streams which add to your profit margin. While there may be more options for residential property management people to take advantage of, there are enough to perk up the income of corporate properties as well. Choose one or several of these ideas and maximize the profit of your property!

Here are the Top 5 Problems that Rental Property Owners Experience

There are five main problems that landowners have to deal with when they rent or lease their property or properties. These are problems that can be easily solved with the right real estate property management company. However, some people try to save money by handling these challenges themselves, and end up wasting valuable resources and burning themselves out in the process. If you see yourself struggling with some of these issues, this might be a good time to take a step back and reconsider your choices when it comes to property management.

TIME - You only have so much time in a day. If you’ve invested in property and still have a full-time job, you don’t have a lot of time left over - especially if you have a family - to give your property the attention it needs. Even if you are retired or semi-retired, there’s a lot of work to do when it comes to the day to day issues of renting and maintenance. It’s a 24/7 commitment. Your time is better spend arranging financing for necessary renovations or looking for new investment opportunities.

DISTANCE – If you don’t live near your rental property, checking on it and even interviewing potential tenants takes a lot of time and effort. Now add in dealing with tenant complaints, maintenance issues, emergencies, even just collecting the rent on time. If you manage your own property or properties, you’d need to live close by to be efficient and time effective. And the best investments may not be right around the corner. This limitation can affect your long-term success.

INEXPERIENCE – If you don’t know anything about residential property management, you’re in for a series of nasty surprises. There is so much involved that you’ll be overwhelmed just finding out all you have to do. And you not only have to do it, you need to do it quickly, correctly, and legally. Hire a bad or lazy repair person, or take too long filling vacancies and watch your profits melt away. Legal errors will cost you if you don’t understand the housing laws, or if you take too long to fix a furnace in the middle of winter.

MANAGEMENT – There is much more to it than you realized, most of it dealing with people: tenants, repair people, accountants, maintenance people, and lawyers to name a few. Along with collecting rent, maintaining the property to code, and dealing with complaints and problems, there is payroll and a pile of legal requirements and considerations. Basically, you’re an employer with all the accompanying headaches. And I’ll bet that’s not what you signed on for when you invested.

TENANTS – Finding and keeping good tenants isn’t easy. A vacancy is money slipping through your fingers. You need to create enticing ads with good pictures to attract the kind of tenants you want. You must respond to emails, interview people, show the unit, review applications, pull and review credit reports, call references and past landlords, prepare a lease negotiate the terms, get the lease signed…and this is still no guarantee of getting a good tenant – especially if you’re not experienced with renting. Good tenants need a quick follow-up for repair needs. Bad tenants cost you time and money and a few rounds with the legal system to get rid of them! Until they’re gone, one bad tenant can cost you many good tenants, and a lot of money.

The answer to all of these problems is simple. Hire a good residential property management company. They will handle every management issue from renting to maintenance…from emergencies – they get the 2am call that a pipe has burst – to evicting the nightmare tenant. They know the ins and outs of vetting and keeping tenants, all the legalities involved in any situation, and have the best repair people on call. They will lift the weight of property management from your shoulders, and let you relax and watch your investment grow. If you haven’t before, now might be the time to look into finding a good real estate property management company.