Managing commercial property with multiple tenants can be very demanding. Ultimately it is the skills of the property manager in controlling their day and the property that is critical to success.
The landlord of a property needs stability of rent, tenant mix, and outgoings. That is why a good and experienced property manager is required to keep things on track. Any property manager will not do when it comes to commercial or retail property; inexperience in that regard can impact the property performance very quickly.
Here are some of the golden rules of property management in commercial and retail premises:
- Lease occupancy should be monitored. A good lease document is the key here. Generic leases are a waste of time as they do not fully cover most of the unique property issues that can come from a special property. Landlords are better protected in a solicitor prepared lease.
- Terms of tenancy usage should always be watched so the tenant does not step outside the terms of the lease. When the tenant bends the rules or does something wrong it pays to handle it quickly and always using the terms of the lease as a backstop.
- Payment of rental should be in accordance with the lease documentation at all times. When late payment occurs then steps are taken quickly to serve the appropriate notices and demands under the lease. Collection of arrears is always important. Left unchecked it is very easy for arrears to get well out of control. Time is critical when it comes to arrears follow-up. When in doubt always look at the lease first to see what responses are required when rent default occurs.
- Control of building maintenance is both a budgetary issue and also a safety issue. When maintenance threatens the safety of the tenants or members of the public, it has to be responded to immediately. Liability and negligence claims are most common in property management.
- Payment of accounts should be undertaken in accordance with the approved accounts in the property budget. It is wise to get the landlord to approve a budget prior to the beginning of each financial year. In that way the property expenses can be planned.
- Budget performance has to be monitored so the expenditure does not get beyond control and outside of industry averages. Any property with high outgoings will be hard to lease.
- Landlord reporting and communication is a key to property management success. Regular accurate reports are essential to keep the building momentum pointing in the right direction. When the landlord gets the right reports they can give accurate decisions.
The list can go on and the details are always broad and complex. A landlord should choose their property manager based on skills and experience. Low management fees or leasing fees are the wrong reasons to be changing property manager. Experience is the key every time. A good property manager will offset their fee cost many times over through appropriate building strategies in leasing and maintenance, good financial controls and reports, and excellent tenant relations.