What Every Property Owner Needs to Know About Effective Commercial Property Management
“Real estate is the best investment in the world because it is the only thing they’re not making any more of.”
– Will Rogers
One of the best decisions I made in my life was to purchase a commercial property because guess what, now I have an additional and steady income source.
Today, commercial real estate is considered an excellent investment due to its potential high returns, stability, and long-term growth. Its market size was estimated at $37 trillion in 2023. (Statista: Commercial Estate Market Size)
Commercial properties are an outstanding investment and can bring immense profits. However, there are a few important considerations that every property owner must know to maximize property value and optimize revenue. Curious to know what they are? In this article, I will share with you all the major strategies I employ for the effective maintenance of my property.
Importance Of Regular Property Inspections
Who would want their property to lose its value or get into some legal trouble due to compliance negligence? Definitely not me! Conducting regular property inspections helps me ensure exactly that. Here is how it makes a big impact-
Ensuring safety – Since I’ve rented my property as a retail space, it houses many people including employees, customers, and other staff. Routine checks help me identify potential safety hazards before they turn into an unfortunate event, ensuring everyone’s safety.
Maintain property value – Commercial properties are no small investments, regular inspections help preserve their value, identifying any wear and tear or needed repairs at an early stage.
Compliance with Legal Requirements – Ending up in the government’s maws due to legal non-compliance can lead to costly fines and huge losses, these checks also save me from such scenarios ensuring that the property complies with all the rules and regulations.
Protection against property damage – commercial properties are exposed to various risks such as water-related damages, vandalism, and accidents. With regular checks, I am able to spot damages caused by these incidents and get them fixed before It’s too late.
Recently, I noticed some damage on the roof of my building, AAA Roofing in Boise, ID, provided me with their expert assistance to fix all those issues, that too at reasonable prices.
INTERESTING TIDBIT The most expensive commercial real estate on a per-square-foot basis is found in London’s West End. In fact, rents in London’s New Bond Street can reach more than $2,000 per square foot, which is one of the highest in the world for retail properties.
Budgeting For Maintenance And Repairs
I follow a proactive approach to maintaining my property and keep a dedicated budget for maintenance and repairs, this helps me ensure that my property remains in good condition, minimizes unexpected and costly repairs, and maximizes return on investments.
Conducting a thorough inspection assists me in understanding the property’s specific needs, tracking expenses including different service fee, and preparing for both emergency and routine repairs. This is like a preventative measure that provides me peace of mind by helping me keep my property safe, functional, and profitable.
DO YOU KNOW? As of 2024, the real estate market is worth $4.12 trillion, and it is expected to reach $7.03 billion by 2034.
Keeping Accurate Financial Records Essential
I cannot stress enough how beneficial it is to keep meticulous financial records for your building. These records not only benefit me by providing a track of expenses but also provide valuable insights into my property’s financial health, ensuring that it is well maintained while simultaneously optimizing profits.
To help you understand it better, I have listed down some of its major benefits that I have observed –
Improved Budget and Forecasting – Keeping detailed records allows me to create realistic budgets for operations and capital operations. This saves me from unexpected expenses and financial disturbances. It also assists me in better financial planning by helping me forecast future costs and incomes based on past expenses.
Audits and Transparency – I need to maintain external audits for my commercial property, and having transparent and accurate financial reports ensures that these processes go smoothly for me.
Income Tracking – Documenting all the income generated and keeping track of all expenses such as maintenance costs, property taxes, and other utilities, assists me in various tasks such as budgeting, tax filing, etc.
Legal Protection – There is always a possibility of legal disputes, such as tenant disagreements, property damage, and contractual issues. Having well-documented financial reports keeps me free from such worries, protecting me from legal proceedings.
Owning a commercial property is not just about enjoying its financial benefit, it also brings some responsibilities with itself. As an owner of a property, you need to be aware of some major considerations in order to properly maintain your property and protect yourself from any legal troubles.
As I shared in this article, regular inspections of your building, budgeting, and keeping accurate financial records are three of the most important aspects of property management that every property owner should pay attention to. Reflecting on the suggestions, advice, and considerations mentioned in this article will surely help you manage your commercial property effectively.
