Managing commercial property without hustle
Managing property is not as easy as some people think. Stock photo
What you need to know:
- Annoying tenants, dodgy service providers, the law! Sometimes managing property is just too stressful and employing the services of a property manager can save owners from the baggage.
Sheilah Namwanje, a property agent, says commercial property can be an excellent investment, but the responsibilities involved are substantial.
There are many difficulties that have driven countless commercial property owners to discover the benefits of hiring reliable property management services.
The following are the challenges property Management services have to sort out without the landlords and how to overcome them.
Finances
Namwanje says there are numerous financial aspects of managing commercial property, including figuring out the amount of rent to be charged, handling the finances, marketing expenses and paying maintenance costs.
“A great deal of research is needed to strike the perfect balance between maximising profits and keeping the vacancy at a low rate,” Ms Namwanje says.
Real estate investment laws
Namwanje says it is necessary to become familiar with valid local, state, and national real estate investment laws. Failure to comply with tax and other regulatory requirements could lead to costly penalties and fees.
“There are many different types of regulations, such as fair housing issues, including considerations for individuals with disabilities. Staying on the right side of the law involves knowledge, compliance, and taking timely actions,” she reveals.
Screening tenants
Namwanje says there are potential risks involved in choosing tenants for your property. Leasing your commercial property to the best tenants will save your time, money, and countless headaches.
“Tenant screening is not always easy. However, making the mistake of approving one tenant who is not a good fit can have a long-term effect,” Ms Namwanje says.
She adds that it can be extremely difficult to terminate a lease agreement early and take back your space. Authoritatively you have to give that tenant a period of three months to vacate your house.
“The primary reason to get tenant screening right is, possibly, the fact that tenant turnover is costly,” Ms Namwanje says.
Yahaya Mutebi, a property managers says operating costs can be seen in your utility bills. Increased indirect costs show up in higher prices for just about everything you purchase, from soap to light bulbs to construction materials but you have to make sure you clear all of them.
He explains that energy saving initiatives should be a priority, as well as a strong maintenance programme to make sure that some of their requests are catered for.
Staffing services
Mutebi says staffing problems can also spill over to the services you contract. Service providers have become more aggressive about demanding higher wages and more benefits.
“When negotiating new service contracts, make sure you look at your historical data and see if there are any potential savings you can uncover and possibly negotiate more favourable terms,” he says .
Tenants
Mutebi says it is estimated that it costs seven times more to bring on a new tenant than it does to renew an existing tenant.
He adds that tenant leases have become a huge issue for today’s property managers because landlords drive the lease terms, even though tenants are tough negotiators.
He added that for new tenants, negotiations may include discount packages for free rent and improvement allowances.
The challenge.
Property agent Sheilah Namwanje says the biggest challenge is when one of the stakeholders in the chain cancels the deal. This happens normally when the buyer is not satisfied with the information provided and this can happen at the last moment.
