With annual returns falling within the range of 6% to 12% of the purchase price, among the best investments that are available today is commercial property.
Profitable investments tend to require a very high time commitment. Also, if you are the owner of multiple properties, it can be nearly impossible for one individual to handle everything on their own given all of the time that it takes to properly maintain all of the properties. It is, at best, like adding on extra full-time job onto the time commitments that you currently have.
At worst, your entire life can be completely overrun by it.
What is even worse, the less time that is spent on properly managing your investment, the less you will earn. So what can an investor do? In order to help you with this issue, we have compiled some of the most time-effective and best way to maintain your commercial property’s value.
Keep Your Tenants Satisfied
Tenants are the most important factor in your commercial property investment. Without tenants, a property is certain to lose money. Therefore, it makes perfect sense that the first step towards having a successful investment is to keep your tenants satisfied and happy.
In fact, losing just one tenant can shake the very foundation of your investment property for years. A research study was published by an industry insider that showed it can take as long as two years to finally recoup the deficit in money that is caused by losing only one commercial tenant. However, if a tenant is kept happy, then it is 3 times as likely that they will renew their lease with you.
Here are several tips for you if you are searching for ways to keep your tenants happy:
Keep Your Building Safe
In terms of tenant satisfaction, your first priority should be safety.
There are some obvious things that are involved to keep a building safe, such as installing security cameras and ensuring that maintenance audits are conducted on a monthly basis. It includes smaller things as well that can be easy to forget (but can go a long way) such as making sure tripping hazards are eliminated and ensuring your property is well-lit for added security at night.
When you prioritize your property’s safety, it will make your tenants feel secure while they are there. In turn, this will make them confident while doing business with you, and lead to more satisfied tenants who are more likely to renew their leases.
Communicate With And Get To Know Your Tenants
People tend to do business with individuals they like. If you communicate with your tenants and get to know them and they like you, then everything else should be easy.
That doesn’t necessarily mean you need to be close friends with all of your tenants. You can actually seem unprofessional if you attempted to befriend them all. However, it does mean that you should always be respectful and professional. Since your tenants will most likely be operating as businesses in your property, you should have a businesslike and formal relationship with them. Treat them the way you would an important client, which they most certainly are, and that will go a long way.
You should also make sure to maintain open communication with your tenants. If your tenants know they can always get in touch with you if something goes wrong, then they will be much more confident and happy to do business with you. One way to receive valuable feedback is to send clients surveys occasionally to find out what they are happy with and what they are unhappy about. Surveys can also make your tenants feel that you value them and their opinions.
Keep Things Clean
Clutter and filth will ruin a person’s view of a property faster than anything. The face of your tenants’ businesses is your property. If it is poorly maintained and messy, then your clients will become unhappy and dissatisfied, and that will ultimately fall on you.
It can be frustrating trying to keep a property clean. It is something people tend to take for granted. No one is going to praise your sparkling clean windows. However, if those same windows are dirty and streaky, you will definitely receive complaints.
Investing in professional janitorial cleaning services will ensure that your building stays clean. It will also save you lots of headaches in the future.
Upgrade and Maintain Your Property
There is more to commercial property maintenance than just wiping down widows and vacuuming windows. There are, in fact, hundreds of different things that need to be done in order to keep a building well-maintained: check the roof for potential leaks, make sure that all emergency and fire equipment is up to code and functional, clean the air intake clean, and more. Even if you happen to know how to do all of those things (most people do not), you need to be insured and licensed in order to perform those services at a commercial property.
Therefore, investors will usually need to either hire a company to handle these matters or hire an in-house property manager. Property maintenance is essential for the same important reason that cleaning is: if you have a well-maintained building, your tenants will be happy. If it is not, their businesses will end up having problems, and you will be blamed for them, ad eventually they will end up leaving your business. You lose money whenever your tenants are dissatisfied.
If you make upgrades to your property in addition to maintaining it, you can increase its value. When you spend money on new technology (like an improved energy-efficient HVAC system or a better security system) or building renovations, it will increase the value of your property. IN turn, this will give you justification for increasing your rent prices and will increase your property’s retail value as well if you decide to sell it.
When you are considering what property improvements to make, cosmetics are particularly important. The value of a commercial property has a lot to do with how much foot traffic it receives. Therefore, improvements that are made to increase the curb appeal of your building (lie a newly paved sidewalk or a new landscape) will increase its value as well.
Invest in Efficiency
When you make your building more green it both increases its value and maintains it. LEED certification is the gold standard when it comes to green buildings. LEED-certified buildings demonstrate more energy efficiency and environmental consciousness compared to normal buildings.
There are many good reasons to consider obtaining LEED certification. When you express that you are committed to the environment, it improves your property for the current tenants and also makes it more attractive for future ones. That is due to the fact that people prefer doing business with companies that make environmental-friendliness a priority. LEED-certified properties actually have 20% higher occupation rates than non-LEED ones. Many consumers are willing to pay extra for the same service when protecting the environment is associated with it.
However, there are even more benefits. A LEED-certified building is more efficient by its very nature. That means that less money has to be spent on electric and water bills. Even if a triple-net lease was signed by your tenants where they are required to cover all of their utility bills, you still are going to end up having happier tenants. Green buildings are also eligible for tax rebates.