If you’re a first-time commercial property owner you may think the complicated part of your new business adventure was choosing the property, but the truth is, once that is done, you need to do your bit to keep that investment profitable.
First of all it’s important to decide which aspects of the maintenance and upkeep of the property fall on you, and which fall on your tenant. Once this is defined, and you have fulfilled all your obligations and responsibilities, ensure you have the finances to cover costs of unexpected future repairs, which are always a possibility. If problems should arise be sure to deal with them immediately. Solving issues as soon as possible will in fact ensure your tenants remains happy, which will lead them to treat you and your property with attention and respect, instead of them becoming discontent and start disregarding the space they are renting. Also, delaying repairs will inevitably lead to greater damage and greater expenses, so it’s in everyone’s best interest if things get dealt with sooner rather than later.
Make sure your property stays current and on trend by giving it an occasional makeover and by being environmentally aware. Energy efficiency has in fact become a big requirement and updating your commercial property in order to answer this growing request will allow you to attract and retain high-paying tenants.
No matter what you do, remember that a vacancy may always be around the corner, and therefore, you need to be prepared. Tenants could default, you may start asking overpriced rentals or may even decide to wait to rent the property to someone you consider to be the ‘ideal tenant’. Whatever the reason, the possibility of you experiencing a reduced cash-flow for a certain period of time is extremely high, so put aside enough funds to face that situation. If it becomes necessary, you could be forced to accept substandard tenants instead of top grade ones just to keep the cash coming in.
Budgeting money for unplanned repairs or unplanned vacancies is crucial in this business, but don’t forget to budget for time.
Whether managing a commercial property with multiple tenants or multiple commercial properties, it’s important you have both the time and the capacity to deal with whatever issues may arise, especially if you are a first-time investor. Consider enrolling a support team, and be prepared for whatever your tenants will throw your way!