What does a commercial property management company do?
The range of tasks and responsibilities that commercial property management companies are capable of handling can be very broad. If you’re a commercial investor or the owner of multiple commercial lots with complex maintenance, financial and tenant needs, the best way to keep yourself from being bogged down in their daily operations is to hire a commercial property management services firm.
These companies offer a robust range of professional staff members who coordinate with you and among themselves to provide many services, including:
Tenant screening
The job of finding and screening potential tenants for your investment or rental properties can be tedious and difficult. Choosing the wrong tenants can cause high turnover and financial losses down the road, not to mention time wasted on the process of selecting applicants.
A commercial property service can take this off your plate by carefully filtering for the best tenants possible. The company can check their financials, conduct credit checks and work to ensure that prospective tenants are the right fit for your property.
Retaining tenants
Finding good tenants is only part of the job of renting or leasing. The next major task is to ensure their tenancy continues by offering the services promised in their contract. Commercial property management service staff can do this by keeping tenants happy in their daily and monthly needs, ensuring the property as a whole is well-maintained and being available for complaints or specific requests, as well as financial details.
Rent administration and lease negotiation
The financial details of renting a property are complex and often tedious, and if you handle them on your own, it can often lead to considerable monthly workloads. A property manager and their associated staff can take care of all this for you by being the financial face of your commercial lot.
They’ll make sure tenants pay rent on time and their payments are accounted for. Property managers also deal with obliging delinquent tenants to make their payments or vacate the property as stipulated in contract agreements and local laws.
The same applies to lease negotiation efforts. Property management companies ensure lease agreements are correctly structured and their terms are kept to by both parties. They also collect lease payments and enforce their collection just as they would with monthly rental payments.
Property management companies can also set your rent for you by comparing your rates to those of similar commercial properties in your area to ensure your rates are competitive.
Organizing property maintenance
One of the most fundamental and ongoing responsibilities of any commercial property management firm, regardless of size, is fulfilling your property maintenance needs on a consistent, professional and thorough basis. This means handling all the direct labor necessary for daily building maintenance, grounds-keeping, repairs, property inspections and regulatory compliance.
Property managers can also subcontract any work they don’t do themselves to a shortlist of reliable, trustworthy local contractors and ensure you’re being billed fairly for the repairs. Their duties also include assisting in and complying with regulatory code inspections for your electrical systems, HVAC, plumbing and more.
Financial tracking
The overall financial side of administering your property isn’t just about rent collection, rent setting and lease agreements. It also involves tracking and paying for numerous other expenses and daily billing needs. A reliable property management company can handle all this for you in a way that ensures a smooth, sound administration of expenses and revenues.
Their accounting department keeps adequate records of your incoming cash and outgoing expenses, along with any random or scheduled accounts payable and accounts receivable. They’ll track operating costs, marketing expenses and repair budgets within the budgetary limits you set for them based on your expected gross income. A commercial property management company can also handle your CAM expenses effectively, ensuring that both you and your tenants know what each is responsible for covering as an expense.
Budgeting
Commercial property management companies bill you for their services, but having one administer your properties can be a sound budgeting decision that saves you more money than it costs in the long run. This is because these companies have professional experience in thoroughly budgeting for the upkeep of a commercial property.
They know how to keep expenses low, prevent costly mistakes and effectively squeeze revenue from your property. Taken together, the savings you can potentially gain from having all these things done for you can far outpace the cost of hiring property managers in the first place.
Document management
Managing your property and handling contractor payments, accounts payable or receivable, rental payments and lease agreements can generate reams of paperwork, as can dealing with all the regulatory compliance that your building has to undergo. Taking care of the documentation needs yourself can quickly put you in over your head unless you’re very experienced with the whole process.
When a commercial property management company handles all your administrative needs for you, it also handles your documents. For this reason, you can be relatively sure that your property is fully compliant with financial statutes, local building maintenance codes and safety regulations.
What kind of internal staff does a property management company use?
To handle all the complex tasks for numerous property-owning clients, most commercial property management services have a diverse staff on their team. This can vary a bit from one management company to another, as not all are equally equipped for diverse services, but the general staff roster will include:
Property manager: This individual handles the broadest range of responsibilities, including tenant relations, predicting and organizing maintenance, hiring contractors, supervising their work, handling other contract services and ensuring compliance with leases.
Assistant property manager: These individuals manage the daily needs of tenants and regular relations with them. They often collect rent, as well as other accounts receivable or payable, and handle other tasks, such as maintenance requests. They also often directly supervise work orders and repairs.
Property administrator: The property administrator deals with the management of work orders, long-term service contracts, financial reporting and special events.
Maintenance engineers: While much of the repair and maintenance work done on your behalf by a commercial property management service will be handled by outside subcontractors as needed, some of it is done by in-house maintenance engineers. Their jobs include general property maintenance, preventative repairs, HVAC oversight and basic repairs, such as leaky roofs or minor plumbing problems. Their tasks can be broader in more complex properties, such as hospitals or industrial facilities.
Accounting staff: The accounting staff at a commercial property management firm handles the full range of financial reporting, compliance and other accounting duties for your property and others. They’re responsible for the financial side of management services and take finance-related information from the property manager, assistant manager and property administrator. This information can then be used for the wider financial management of your commercial properties.
When to hire a commercial property management company
If you own a property that’s large enough and correctly zoned as a commercial asset with expected rental or lease income that’s reasonably large, then hiring a commercial property management company is probably an ideal choice. This applies especially if you believe you’re either not experienced enough with property management or don’t have enough free time to handle the task yourself.
Hiring professional property management services is also a good idea if you own a large, complex commercial asset or multiple pieces of commercial property in different locations.
How to choose a commercial property management company
Choose commercial property management companies by making sure the firms you have in mind are highly reputable and already manage a strong portfolio of other commercial interests. Be careful to select companies that specifically cater to other clients with needs similar to your own. This will make it easier for you to get the best and most ideally tailored range of services for your own commercial property needs.
When you hire a commercial property management company for your real estate assets, you’re contracting all staffing and work to a third-party enterprise. This saves you from having to deal with a massive extra load of payroll reporting requirements and expenses.
