Commercial real estate investors spend significant time researching properties and performing their due diligence before making a purchase, but there is still much to consider once a property has been purchased. Being a landlord is a fulltime job, and while some investors initially think they can manage the property themselves, it typically becomes apparent that hiring a property manager is a wise investment in assuring the property’s efficient operation and long-term profitability. Here are the top seven benefits of hiring a property manager:
1. Pricing Strategy: While it is possible to scour classified ads and research rents at comparable properties, full-service property management companies maintain up-to-date, relevant data necessary to set optimal rates for specific properties in current market conditions. Leasing is one of their core competencies and the databases they compile are basic to a leasing strategy that minimizes a property’s vacancy rate and maximizes its monthly income.
2. Legal Issues: Any property may be encumbered by complex legal issues or subject to code requirements and government regulations. Knowledgeable property managers are familiar with local, state and federal codes and regulations, including, but not limited to, fair housing issues and the Americans with Disabilities Act of 1990 and its far-reaching provisions regarding accessibility for the disabled in the workplace. An experienced property manager can help identify compliance issues that may require further legal counsel.
3. Accounting: Financial reporting is the primary way to measure both property performance and the performance of your management company. Comprehensive financial reports provided by property managers include income statements, balance sheets, general ledgers, delinquency reports, accounts receivable/payable, sales tax compliance and lease audits.
4. Tenant Screening: Not all prospective tenants are the best fit for a given property. Once you have signed a lease and the tenant has moved in, it’s extremely difficult to terminate the agreement and take back the space. An experienced property manager who is responsible for leasing attempts to mitigate this risk by verifying credit and to the extent possible, the compatibility with the property and neighboring tenants.
5. Tenant Retention: Tenant turnover can be costly. Tenants who feel their needs are being met and surpassed are more likely to renew their leases. A qualified property manager provides the superior service necessary to increase tenant satisfaction, and in turn, improve tenant retention.
6. Rent Collection: Collecting rent from tenants can be a time-consuming proposition. A property manager’s responsibilities include dealing with difficult situations and knowing the best methods to ensure that rent is received on time. Responsible managers consistently follow the owner’s rent collection policy, from the first time a rent payment is late. This may include enforcing and collecting all charges for late or returned checks. Property managers also are responsible for promptly serving all legal notices to protect your legal options moving forward. Having a third party between the owner and tenant is often very effective in aiding with collections.
7. Maintenance: Costs related to property ownership don’t end at the closing table. Any property, new or old, can be expected to encounter periodic maintenance issues, ranging from basic repairs to emergency failures and of course, planned capital expenditures. While repair and maintenance expenses are inevitable, an experienced property manager has a vast vendor network and the problem-solving skills to evaluate the proposed solution and knows how to administer vendor contracts.
Please call us to discuss how our full-service property management firm can save you a considerable amount of time and aggravation, while helping you earn the highest possible return on your commercial property investments. Property management is one of the specialized professional services offered by Berger Commercial Realty to both institutional and non-institutional owners. Our primary objective is to provide comprehensive, cost-effective property management while simultaneously exceeding industry standards. To learn more about how Berger Commercial Realty can help you, please call us at 954-358-0900.