As a landlord or property manager, you’re always looking for ways to save money and increase your profits. One area you may be thinking of cutting costs is in commercial property management fees.
However, before you make any decisions, it’s important to understand exactly what these fees cover and how they benefit you and your business.
What Do Commercial Property Management Fees Cover?
Commercial property management fees typically cover four main areas:
1. Rent Collection
2. Maintenance and Repairs
3. Lease Administration
4. Financial Reporting
Let’s take a closer look at each of these services to see how they benefit you and your business.
Rent Collection
Rent collection is one of the most important tasks of a property manager. Not only does this ensure that you’re getting the rent money that you’re owed, but it also ensures that it’s being collected in a timely manner. This can be a difficult task if you have tenants who are constantly late on their payments or who have bounced checks in the past. A good property manager will have systems in place to deal with these situations quickly and efficiently, so you don’t have to waste your time chasing down rent payments.
Maintenance and Repairs
Another important task of a property manager is to handle all maintenance and repair issues that come up. This can include anything from dealing with a broken air conditioner to fixing a leaking roof. If you’re not familiar with repairs, then this can be a daunting and expensive task. However, a good property manager will have a network of reliable and affordable vendors that they can call on to get the job done quickly and without breaking the bank.
Lease Administration
Lease administration is another critical function of a property manager. This includes tasks such as negotiating leases, renewals, and extensions; handling rent increases; and dealing with evictions. If you don’t have experience with these things, then it’s easy to make mistakes that can cost you money in the long run. A good property manager will know how to navigate the lease process so that you get the best possible terms for your business.
Financial Reporting
Finally, one of the most important services that commercial property management fees cover is financial reporting. This includes preparing monthly or quarterly reports that show you exactly where your income is coming from and where your expenses are going. This can be invaluable in helping you to keep track of your finances and make informed decisions about where to allocate your resources.
How Much Does it Cost to Hire a Commercial Property Manager?
The average commercial property management fee is around 8% of the gross rent of the property. However, this can vary depending on the size and location of the property, as well as the level of service required.
For example, if you’re managing a large office building in downtown Chicago, you can expect to charge a higher fee than if you’re managing a small retail center in a rural town.
Of course, there are a few factors that can affect the fee.
For example, if the property is located in an area with high turnover or if it requires a lot of maintenance, the fee may be on the higher end of the spectrum. Alternatively, if the same management company takes care of multiple properties for one landlord or if the property is easy to rent out, the fee may be on the lower end.
What are the Benefits of Hiring a Commercial Property Manager?
There are many benefits to hiring a commercial property manager. Perhaps the most important is that it frees up your time so that you can focus on other aspects of your business. A good property manager will also have experience negotiating leases and managing construction projects, which can save you money in the long run.
Here’s a closer look at some of the biggest benefits of hiring a good commercial property manager:
1. Help you save time
If you are a busy person with a lot on your plate, you may not have the time to dedicate to your commercial rental property that it deserves. A commercial property manager can take care of the day-to-day tasks associated with your property so that you don’t have to. Things like marketing the property, showing the property to potential tenants, and handling maintenance requests can all be handled by a professional property manager.
2. Help you maximize your profits
A good commercial property manager will be up-to-date on market trends and will know how to price your rental units competitively. They will also have systems in place to screen tenants and minimize turnover. All of these things can lead to increased profits for you as the owner of the rental property.
3. Take care of the details
Details like keeping track of rent payments, preparing leases, and dealing with problem tenants are all part of a commercial property manager’s job description. This can free up your time to focus on other things, like running your business or spending time with your family.
4. Provide peace of mind
When you hire a professional to manage your commercial rental property, you can rest assured knowing that someone is taking care of everything for you. This peace of mind is especially valuable if you live far away from your rental property or if you simply don’t want the stress of dealing with it yourself.
5. Offer expert advice
A good commercial property manager will have extensive experience in the industry and will be able to offer advice on everything from marketing strategies to maintenance issues. If you ever have a question or concern about your rental property, your property manager will be there to help you out.
6. Provide valuable services at an affordable price
While you may think that hiring a professional to manage your rental property would be expensive, that’s not necessarily the case. When you consider all of the time and money that a property manager can save you, it is easy to see how hiring one could actually save you money in the long run.
This is your chance to become a master of rental property management – Achieving Financial Success as a Property Manager: An Insider’s Guide has all the information and strategies you need to succeed in this field.
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