Manage Commercial Property? 9 Things You Need To Do For Success

Property management success can be tricky, but it's not impossible. Here are 9 tips for being a successful property manager.

Manage Commercial Property? 9 Things You Need To Do For Success Close
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Manage Commercial Property? 9 Things You Need To Do For Success

Posted by Gary Ashton on Wednesday, May 22nd, 2024 at 7:11am.

Tips For Success as a Nashville Commercial Property ManagerMany benefits await anyone who decides to manage a commercial real estate investment. Operating a commercial rental space means extra income while providing other businesses with a brick-and-mortar space for their operations to be successful. Overall, the key to success as a commercial property manager is to create situations that are mutually beneficial to the tenants and the property owner. Wondering how to attract good tenants and best manage your commercial investment? Keep reading for the ultimate guide on finding success as a Nashville commercial property manager.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

What Is Commercial Property Management?

Commercial property management involves overseeing and maintaining various types of commercial real estate, such as office buildings, retail centers, industrial complexes, and mixed-use developments. The primary goal is to ensure that these properties operate efficiently, remain profitable, and satisfy both owners and tenants.

What Do Commercial Real Estate Property Managers Do?

  1. Operational Management: Oversee day-to-day operations, including maintenance, repairs, and vendor coordination to ensure smooth property functioning.

  2. Financial Management: Handle budgeting, cash flow management, and financial reporting to maintain profitability and financial health.

  3. Tenant Relations: Act as the primary contact for tenants, addressing concerns and implementing retention strategies to maintain high occupancy rates.

  4. Lease Administration: Manage lease agreements, ensuring compliance and tracking expirations and renewals to maintain steady tenancy.

  5. Maintenance and Repairs: Schedule inspections and coordinate repairs to preserve property value and ensure a well-maintained environment.

  6. Risk Management: Mitigate risks by ensuring safety regulation compliance, maintaining insurance, and implementing security measures.

  7. Marketing and Leasing: Attract new tenants through marketing activities, property tours, and lease negotiations to maintain high occupancy.

  8. Compliance and Legal Issues: Ensure adherence to real estate laws and regulations, handling any legal issues in coordination with legal professionals.

  9. Capital Improvement Planning: Plan and oversee major upgrades or renovations to enhance the property's value and market competitiveness.

Things Commercial Property Managers Need to Do to Be Successful

Be Knowledgeable About the Commercial Real Estate Scene

Before committing to a real estate commercial investment, there's a lot to know to promote long-term success. From choosing the best location for commercial investments to keeping up with commercial real estate market trends, the best property managers are constantly researching and learning about the local real estate market. While getting some experienced guidance from developers, brokers, and agents is a good idea for new investors, even experienced ones are more likely to see steady profits and have fewer issues as owners, landlords, or managers.

Make Stipulation Plans for Vacancies

Inevitably, tenants won't occupy the space forever, so property managers and landlords should have a backup plan to deal with vacancies. Finding new renters for commercial spaces can be more challenging and take more time than filling residential spaces.

People always need a place to call home, but not everyone has the financial resources or desire to start a business. Have a backup fund to cover lost rents and a real estate agent on board with updated property info should an unexpected vacancy arise.

Have a Detailed and Legal Lease

Don't get shortchanged or leave room open for confusion in commercial tenant leases. Inclusions should be both legal and fair for both tenants and landlords. Online programs can generate leases and software management applications to keep things on track. However, commercial property managers will want to have a real estate lawyer on their team to verify the legality of any leases before having tenants sign them.

Stay on Top of Commercial Property Maintenance

Depending on how the lease is written up, the property's tenant may have specific responsibilities for upkeep, especially concerning the cleanliness of the interiors. However, in general, the landlord or property management company will be liable for maintenance and repairs of the building's structural aspects.

In situations where multiple tenants are present, there may also be common areas like parking lots or garages that require upkeep. Happy tenants tend to stick around longer if essential repairs and maintenance are handled professionally and quickly. There are other benefits to doing so beyond tenant retention, including:

  • Lowering maintenance costs
  • Preventing minor issues from becoming more extensive and expensive
  • Keeping the property looking attractive
  • Helping maintain property values
  • Preventing injuries that could result in legal action

Reputation is everything in commercial real estate property management, so be sure that reputation stays solid amid the community.

Meet or Exceed All Health & Safety Codes

While specific operational permits and meeting codes are up to the tenant to maintain, property managers must make sure essentials are up to your city's current code requirements upon a tenant moving in. This includes fire and safety regulations, eliminating lead paint or asbestos, and having wiring up to date. Commercial property owners and managers can be fined for failure to follow safety protocols in some situations.

Invest in Solid Building Security

Tenants will be more eager to rent and stay in a facility with adequate security that may range from monitored cameras, sensors, lighting and alarm equipment to 24/7 security or both. Ensure that window and door locks work, as well. Solid security measures protect the building whether it's occupied or not and can qualify owners for insurance discounts.

Be Choosy About Tenants When Possible

In addition to doing due diligence in checking on applicants concerning their financial ability to pay and that they pass a trustworthy background check try to find agreeable tenants. If they are reasonable in their tenant expectations, landlords and property managers will be more motivated to meet their needs. Mutual respect between landlords and tenants is a significant key to success in commercial property investments.

Go The Extra Mile For Tenants

There may be a tenant who always pays on time who suddenly needs an extra few days occasionally. Establish a stronger, more trusting relationship by waiving a late fee from time to time or making a minor repair that may not be covered under their lease. This goes a long way to creating a successful commercial investment property.

Use Commercial Property Management Software for Optimal Oversight

Managing a commercial property involves a lot of information. Keeping up with all the facts and figures, tenant statuses, and other issues can be overwhelming, even for professional management companies. This is where the benefits of investing in technology play a role in successful ventures and smooth operations.

Commercial property management software is superior to manually tracking data, as it records, stores, and sends notifications to management and landlords about critical data. Some key statistics these applications can monitor so informed decisions can be made include:

  • Current rents
  • Income to profit margins
  • Types of occupants and businesses in properties
  • Rental turnover rates
  • Standing with local and federal regulations and codes
  • Taking in and tracking work orders for maintenance
  • Payments due to property staff and contractors

This is just the tip of the iceberg concerning what a property management system can do. It can allow for online bill pay, help with marketing the property and let renters communicate directly with landlords and management.

Manage Commercial Real Estate Like An Expert

Even if you aren't an expert in commercial real estate (and even if you are), don't go at it alone! A real estate professional with experience and knowledge can assist with making smart investments and even recommend local property management firms and brokers to help operate your investments.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.


Gary Ashton

The Ashton Real Estate Group of RE/MAX Advantage

The #1 RE/MAX team in the World!

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