A commercial property manager is an individual responsible for running the day-to-day operations of the building. The property owner guides them in their managing role but allows them to be the face of the building.
We’ll get into the nitty-gritty details below, but at a high-level, the property manager is in charge of sourcing tenants to fill any vacancies, retaining existing tenant leases, providing the required commercial maintenance for upkeep, and following budgets and reporting on finances.
What Does a Commercial Property Management Company Do?
As a commercial investor, your main priority is sourcing properties with a high rate of return. Your daily focus shouldn’t be on the daily operations of each property — the more properties you accumulate, the more stretched you’ll be for time.
The goal of a property management company is to relieve some of the burdens off of the owner’s plate. They do so by facilitating the majority of the day-to-day responsibilities. The types of tasks will vary from property to property, but most property management companies have the resources to perform the following services:
Screening Tenants
Finding high-quality tenants for your building is of the utmost importance. Securing the wrong tenants can lead to higher turnaround and more vacancies down the line. A commercial property management company’s goal is to fill the building with the best tenants possible. They handle screening prospects to ensure they’re going to be the ideal fit.
Tenant Retention
Once you have tenants in the building, you need to keep them satisfied to ensure they renew their lease. The property manager will be the face of the building, performing the day-to-day responsibilities that will keep the property well-maintained and the tenants happy by being attentive to their comments and concerns.
Collecting Rent
Having your spaces leased out is great, but you need to make sure all your tenants are paying rent — and paying rent in a timely fashion. One of the responsibilities of the property manager is to collect rent from tenants. To do this, they will set up a streamlined process that makes it easy for tenants to pay, ensuring that cash is flowing and operational expenses can be paid on time. If a tenant isn’t paying their rent in its entirety, they’ll chase down the tenant until the bill has been collected.
Setting Rent
Part of the day-to-day operations a property manager can assist with is setting the rent for tenants looking to move into the building. To do this, they will set competitive rates to ensure they’re attracting the right prospects to the building. Property managers will ensure they are comparable to other properties in their area. Comps can change frequently depending on the market. These should be reviewed regularly to guarantee you’re always staying competitive with your rates but bringing in enough money to positively impact the bottom line.
Lease Negotiation
As a property owner, you might not have the time to deal with all the details of a tenant lease or renewals. The property manager takes on the responsibility of negotiating the lease terms with both prospective and renewing tenants.
Facilitate Commercial Property Maintenance
From fulfilling commercial maintenance requests submitted by tenants to hiring contractors to complete regular building maintenance, the property manager helps facilitate it all. The property manager ensures that all requests are completed quickly and accurately, while simultaneously making sure the property is well-kept. Property management companies often have a shortlist of well-respected and reputable contractors that they work with, meaning that you’ll always have the best of the best working on your property.
Track Finances
There are a lot of costs that go into the operation of a commercial property. If you’re not the one managing the daily responsibilities, it can make it even more difficult to understand where the money is coming in and going out. When working with a commercial property manager, they will be responsible for the management of building expenses. This means that they will track all operating costs, marketing costs, repair costs, and more. They follow a strict budget set by the owner and report on this regularly to ensure they are maintaining the projected gross income.
Commercial Property Marketing
When there are vacancies in your building, you want to get them occupied as soon as possible. The sooner you have a tenant locked in, the quicker you’ll see that cash coming in each month. A property management company understands the best way to showcase your commercial property for prospective tenants. They’ll continually work to fill the vacancies through posting online listings, creating marketing collateral, hosting special events, designing physical signage, and more.
Document Processes
There’s a lot that goes into the day-to-day operation of a commercial property. When working with a commercial management company, you can have peace of mind knowing they’re documenting the different building procedures that are in place to ensure compliance with governmental statutes and administrative regulations and safety codes.
Not all property management companies offer the same services. It is important to select a management firm that aligns with your commercial property type and specific needs. Whether evaluating firms for yourself or your clients, look for a commercial management firm that provides the type of management services needed.
When to Hire a Commercial Property Management Company
While there are many advantages to hiring a commercial property management company, it isn’t always in the budget for every property owner. Sometimes it’s hard for an owner to give up the day-to-day responsibilities, and that’s alright — if you have the time.
If you’re in the selection process of hiring a property management company, consider the following before making a decision. You should invest in a commercial property manager if:
You Overextended Yourself
Your time is valuable — and you won’t have the capacity to grow your investment portfolio if you’re spending all your time managing your tenants. Hire a property manager to manage the tedious day-to-day responsibilities. That way, you can spend your time looking for new commercial opportunities or renovating your existing portfolio.
You’re Managing a High Volume of Commercial Properties
Handling both ownership and management responsibilities is feasible if you only have a few commercial properties in your portfolio. But as the number of buildings grows, it’s much harder to give enough time and attention to either role. Hiring a property manager to facilitate the daily operations of some or all of your properties can help you make better use of your time.
You Don’t Enjoy Managing the Day-to-Day Management
Just because you own the property doesn’t mean you need to manage it. Not everyone likes to worry about the little details that go into the daily operations of a property. While some landlords might enjoy being the “face of the building”, others might prefer to be more behind the scenes. Hiring a property manager allows you to understand what’s going on at the building so you feel involved. A property manager handles the “heavy lifting”.
You Have Too Many Admin-Related Tasks On Your Plate
The more properties you take on, the more help you’re going to need to successfully operate your properties. Hiring a property management company ensures nothing falls through the cracks. They keep your property is in the best shape possible so you can win over prospective tenants and keep existing tenants satisfied.
You Can Afford a Commercial Property Management Company
Hiring a property management company is one of the most important decisions an investor can make. A reputable property manager can provide management expertise, financial stability, and professional excellence. If you can afford the cost of a property manager, it’s the ideal time to try it out. You might find that you’re able to spend more time finding new investment opportunities. In turn, growing your portfolio at a rate you haven’t been able to accomplish before!
How to Choose a Commercial Property Manager
When in the market for a reputable property management company to add to your team, you must do your research and find a company that aligns with your investing goals. You don’t want to choose the first company you find online. You need to understand how the property management company has performed in comparable buildings in the past. Ask them to provide examples of their successes and management results for comparison.
Finding a property manager who fully understands your investment goals is paramount to the future success of your investments. The right property management partner will have your portfolio’s best interests in mind. They will do whatever they can to continually increase your property’s value. With Price Commercial Properties, you can have peace of mind knowing that your properties are in good hands.
