While owning commercial property is a great source of income and wealth building, it can quickly become a financial and time drain if you are not continually working on improvement. It does not take long for misunderstandings to turn into litigation or a small leak to turn into a mold remediation nightmare. Constant supervision and communication can overcome a lot of obstacles before they become unmanageable. Here are my top six reasons for hiring a dedicated property manager to protect your investments.
- Developing and maintaining tenant relations– Having a great working relationship with your tenants is not always easy, but it is extremely important to your operation and renewals. It will take hard work and honesty to win them over, but it will normally buy you the benefit of the doubt in unclear situations and advanced warning of any potential problems. The manager will be there multiple times a month with inspections and repairs so this face to face contact makes it easier to develop that relationship.
- 24 hour emergency response– Ever rolled out of bed at 3am to deal with a flooded office building or a break in at a retail center? If you have, you know that it is no fun and makes for very long days. If you are not in the real estate industry, and do not have a network of contractors that can jump in and get things done, these situations turn from bad to worse. Having a manager can help insulate you from these issues and mitigate the damage and cost of emergencies.
- Manage contractors and supervise repairs to completion– Fielding the calls from and staying on top of contractors can be a full-time job. A good manager will handle these problems from the detection, to bids and negotiating pricing, through inspections and enclosed permits. Making sure these jobs are done thoroughly can prevent long term issues that cost you time and tenants.
- Reviewing all invoices for accuracy– Once these repairs have been completed to a high standard, it’s time to make sure you are being charged correctly. In the construction industry, invoicing mistakes can be easily missed. Finding these mistakes and correcting them before payment is issued can improve your bottom line.
- Auditing everything– When picking up new properties, I spend the first few weeks going through all leases, service agreements, insurance policies, contracts and invoices to ensure that we are starting at the right place. I have had instances of tenants who have not had their lease amounts increased as stated, vendors charging more than agreed, and poor reserve management. These items are a drain on your system that prevents your investment from performing as well as it should. This audit process can make or save you money almost every time.
- Accounting and reporting– Accounting is one of the most time-consuming jobs in the industry. From collecting rents to payouts to owners and everything in between, a great checks and balances system can ensure that nothing is being missed or overlooked. Without accounting, no one makes any money so ensure that whomever you hire to do it is very capable. As important as accounting is, reporting that information is just as crucial. You will have the peace of mind from a monthly report that gives you the entire picture of the finances and condition of your property.
Owning commercial property can be as easy as cashing a check if you put the right people in your corner. If you have a job outside of the Real Estate sector, you can’t afford not having a manager protecting your asset.