Commercial Property Management - Essential Maintenance Practices Part 2

In continuing the tips for managing the maintenance in a commercial or retail property here are some more ideas for commercial property managers and landlords.

The permitted use relating to tenancy space and tenant occupancy under the terms of each and every lease, should comply with the property occupancy certificate. Normally this will occur although the use of the property by the tenant can be overlooked in its compliance with the issued occupancy certificate. Any threats or non-compliance will expose the landlord to risk and litigation. The property manager should ensure that matters of compliance are adhered to when it comes to these things.
Energy management is today becoming a critical component of outgoings costs and outgoings management. Importantly the managed property should comply with achievable energy management and saving processes to help maintain realistic levels of outgoings charges for the tenants. There are various ways to handle energy management using devices, time clocks, and the latest technology controlling the plant and equipment in the building. Engineering consultants can assist the landlords and property managers to understand strategies within this process relative to the particular property.
Contracts management within the managed property will be ongoing and should be looked at at least every 12 months. Essentially the contracts for maintenance procedures within the building and with the essential services should be regularly assessed for cost efficiencies and code compliance. In some managed properties it is not unusual to put the major maintenance contracts to tender each period of 12 months. This maintains some semblance of cost control for the landlord.
When it comes to the maintenance costs and controls within a managed property you will find that averages exist between properties of similar type in your local area. As a direct result, these averages should be understood and researched so that your managed property does not exceed the expectations of the market and the averages in comparable properties. It is very difficult to lease a property with high levels of outgoings costs. It is also very difficult to sell a property with high levels of outgoings costs.
The outgoings for a building should be budgeted on an annual basis by the landlord and or property manager. The budget should take into account the trends of maintenance expenditure locally in comparable properties, and the physical demands of maintenance within the given property. When the budget is set, it gives you a benchmark to work to throughout the year; the budget is an expenditure control tool. The budget should also allow for some unexpected repairs and maintenance breakdowns in addition to the expected and planned maintenance events. Any matters of a capital expenditure nature should be removed from the normal expenditure for the building as capital items would normally be depreciable under the local tax laws.

If you want some more tips and ideas to help your commercial or retail property management processes, you can get a free eBook of tips and tools at http://www.commercial-realestate-training.com/

John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.

Original article

Commercial Property Management - Checklist for Property Management Handovers

When you take over the management of a commercial or retail property today, the information that you gather from the outgoing property manager or landlord will be critical to the establishment and future success of your property management processes.

Information is Critical

Lack of information in the handover process means problems and potential errors in the future. On that basis you should have a specialised handover process that you can implement on and with the handover of every property type within your local area. A checklist will help your activities as you bring in the new property to the management portfolio.

Here are some ideas to incorporate into your handover checklist:

Get complete and comprehensive details of all leases and licensed occupied areas within the property. You will need to check these against the tenants physically in occupancy and the rental invoices that are raised for tenancy payment. Everything has to cross relate accurately.
Copies of lease documents should be checked against the original documentation. Also look for side agreements for any extension or variance documentation relating to the original lease.
Copies of correspondence relating to existing tenancy matters should be handed to you. Ask for this specifically and drill down on the details of each matter.
Get copies of the current rental invoices and cross reference these to the tenancy schedules for the property. It is not unusual to come across in errors in the tenancy schedule or the rental invoices.
The tenancy schedule should be checked against the actual leases and other occupancy papers and the signed documentation between the landlord and tenant.
Check all outgoings charges and expenses that are applied to the tenancies within the managed property. The charging process should be shown on the rental invoices; you will need to check this amount and the process of recover that is adopted. It is not unusual to see errors in the outgoings recovery with tenants in managed properties. The process of checking will involve you getting copies of the current outgoings budget and the recent outgoings reconciliation.
The arrears that apply to the property and any tenancies should be identified as part of the handover. They are sometimes discharged at the time of settlement, although the question should be raised in case you are taking over the ongoing pursuit of the arrears with any existing tenants. If that is the case you will need copies of all previous correspondence and claims.
Current vacant tenancies within the premises may be the subject of lease negotiation. You will need copies of the lease offers that are or have been made and the status of the existing negotiations.
Details of the maintenance issues within the building will be required. The essential services within the building will be critical maintenance contracts to identify early in the Handover. Any threats to the stability and function of essential services should be identified and addressed immediately. The maintenance contractors for the building will understand the function of the existing plant and machinery; get details of these contractors and then set up meetings as quickly as possible.
Ask about any orders or notices that apply to the property or any part thereof. Check out any encumbrances, rights of way, or easements that apply to property usage.

So these are some of the main items that apply to the property management handover process. There will always be more issues and items to look at although these items listed above are the big ones to immediately get under control.

If you want some more tips and ideas to help your commercial real estate agency and convert more opportunity into listings and commissions, you can get a free eBook of tips and tools at http://www.commercial-realestate-training.com/

John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.

Original article

Commercial Property Management - Essential Maintenance Practices Part 1

When it comes to managing a commercial or retail property, maintenance aspects must be well controlled and actioned. Failure to do so can see the property manager and or landlord exposed to litigation.

The visitors to a property and the tenants within the property expect safe usage and access. This is where maintenance management is integral to the property management strategy implemented by a real estate agent on behalf of the landlord.

Maintenance is important; a landlord should choose an experienced property manager and a real estate agency that understands the property type and the required maintenance management processes. It is quite incorrect and counterproductive for the landlord to choose a property manager based on low fees; the best property managers cost money, but the service and attention to detail for landlords is far superior. This allows a property to function well and improve financially.

Here are some of the main maintenance concerns and strategic practices involved in commercial or retail property management today. They are:

The tenants within a property should understand how to connect with and contact the property manager when any maintenance events arise. In most circumstances maintenance will be of an ordinary nature and repairs can be undertaken within a few hours or a few days without threat of injury or danger. A paper trail is important here when it comes to maintenance response and actions taken. A paper trail will help protect you in cases of dispute; always keep good records.
Unplanned major maintenance events can expose the landlord and property manager to legal pursuit and litigation. In simple terms, if the maintenance failure of the property can injure any person or disrupt occupancy, then matters of response and safety need to be strategically implemented immediately.
The terms and conditions of most leases will place obligations on the landlord to undertake the maintenance work in a timely way. Check the lease to see what it says in this regard.
Every property under management should be inspected regularly and frequently. At the time of inspection accurate notes and records should be kept. This will also involve photographs of any damage or circumstances, and any associated interviews with tenants as required. In situations of major property breakdown of all maintenance failure, the records of previous inspections will be critical to support the investigation and possibly protect you from litigation.
Matters relating to workplace health and safety and risk management within the property should be carefully managed. Specialist contractors should be engaged to implement the necessary maintenance procedures with the buildings essential services. In most cases log books are required to allow compliance with property and building codes. Do not overlook the tenant occupied space in this regard as the tenants will have compliance issues to deal with.

If you want some more tips and ideas to help your commercial real estate property management, you can get a free eBook of tips and tools at http://www.commercial-realestate-training.com/

John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.

Original article

Commercial Property Leasing Specialists - How to Review Leases and Tenant Mix

When you as the property manager take on a new property management, the most important part of the handover process will involve a review of all current property or tenancy leases. Leases form the backbone of the tenancy mix and the rental or income profile. An investment property without well written leases will be difficult to sell and or market.

The main skills to develop as a property manager are in documentation and lease interpretation. A property with many leases will always be complex when it comes to the lease review process. Each lease may be unique and different, and on that basis should be completely reviewed with regard to all terms and conditions. Look for the differences in the leases, because they will be there.

It will take time to capture the necessary critical dates and the terms and conditions that affect occupancy. The critical dates and the important terms and conditions of the lease would normally be entered into some form of software diary program specially designed for lease documentation. This allows you to stay on top of the main events from the lease and serve the necessary notices as appropriate and at the right time.

Here are some of the big issues to look for when it comes to lease interpretation and review.

The identification number or reference suite number for the tenancy should be unique and different. It may also refer to some reference point within the property plans or survey plans. If these plans exist, it pays to get a copy of them as part of the handover process.
The lease will make reference to the names of the landlord and tenant. These will be the legal identities on which any notices are served under the terms of the lease. There will also be addresses relating to the services of notices.
The status of rent charges and outgoings charges raised in the monthly rent invoices should be checked against the lease. Make sure that all rent reviews and outgoings charges or reconciliations have been correctly handled.
The demised area and the permitted use for the premises will be detailed within the lease. The demised area refers to the location of occupancy, and the permitted use refers to the use that the premises may be put to. Importantly the permitted use should be in accordance with the property occupancy certificate and the zoning relative to the property location. Check that the tenant is using the premises in accordance with these factors.
The term of the lease will be the initial term of occupancy. That will normally be a number of years and or months. The start and end date of the lease will be relative to the lease term. These dates are critical dates and should be entered into your property diary process with a necessary lead time for any action.
At the end of the initial term of lease there may be an opportunity of lease renewal for the tenant to consider. This renewal term will also be a number of years or months as the case may be. The dates relative to the time to exercise of option should also be entered into the diary process.
The rent review process throughout the term of lease may vary in type and timing, and set dates will apply to the review process. The rent review dates are also critical dates to enter into your diary process.
The lease will normally refer to obligations of the tenant regards outgoings and property expenditure. In many cases the outgoings will require contribution from the tenant during the lease. As to what outgoings are contributed towards by the tenant will also be detailed in the lease documentation. Given that the outgoings clause of the lease is so important, it pays to spend time in the interpretation and capturing of the clause detail. Read and understand it fully.
Special areas and other factors of occupancy such as car parking, common areas, and access points should be identified in the lease document. It is likely that certain rules and regulations will apply to these special areas and how they are to be used.
A lease will normally feature specific terms and conditions that apply to the landlord and the tenant. A complete review of these terms will help you understand other matters of importance relating to these parties.
Insurance obligations commonly occur within a lease document. It may be that certificates of currency are required each year to evidence the existence of the required insurance policy. Plate glass insurance is a common one to look for.

So these are some of the main items relative to a lease review process. Given that each property is unique and special, other situations and obligations can exist within the lease. A property manager should be very comfortable and consistently accurate in their review of lease documentation. If any terms of lease cannot be understood or recognised then a property solicitor should be involved to assist lease interpretation. When in doubt, ask questions. Errors in lease interpretation will normally cost money to rectify.

If you want some more tips and ideas to help your commercial real estate agency and convert more opportunity into listings and commissions, you can get a free ebook of tips and tools at http://www.commercial-realestate-training.com/

John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.

Original article

Commercial Property Managers - Keep Your Property Full With a Tenant Retention Plan

When you are working as a property or leasing manager on commercial investment property, it is wise to implement a tenant retention program for the property itself but also for the landlord in the greater portfolio they may own.

A tenant retention plan will help the overall income strategy for the subject property and minimise vacancy downtime. In this property market and economy a retention plan within the tenant mix will help the income and expenditure budget for the property. It's simply a great idea and tool for the property manager to use.

Special Service

So the tenant retention plan can become a specialised service for the real estate agent that specialises in commercial and retail investment property. It can be called a number of things, all of which help the marketing of the concept to the property owners the agent represents.

The key benefits of a tenant retention plan or program are:

Income stability through planned lease options, rent reviews, new leases and tenant placementAllocation of leased space to the tenants that most need itMaximised rental given local market rental trends in comparable propertiesDirected lease strategies to sitting tenants that retain their occupancyExpenditure recovery from a more stable and predictable occupancy and outgoings baseLease terms and conditions that help the landlord match their investment holding plansRenovation and relocation programs that can be integrated into the retention plan

The tenants in a property will usually cooperate with a retention program for the simple reason that they appreciate the focus of the landlord and property manager on their needs as a business.

To get the retention program up and running a simple staged approach is best. Here are some ideas:

Set up a questionnaire for the tenants to complete and talk to you about each month or quarter; meeting frequency is depending on the activity in the property and the surrounding area.Expect that other agents will be chasing your tenants to change property lease. The retention program helps keep this pressure under control.Review all leases in the property so you know the critical dates that will impact the retention plan. They are usually rent reviews, lease options, lease expiry, and renewals.Check out the supply and demand for leased space in the local area as it will have impact on the choices you make with your property.Changes to the community and businesses surrounding the property should be monitored on a monthly basis at the local planning office.Negotiate early with any desirable sitting tenant. This prevents them getting rental offers and proposals from other nearby properties.

A tenant retention plan is a good property management or leasing tool. The property owner will see solid advantages in implementing the plan into their tenant mix and investment plans.

If you want more free tips and ideas to help your agency with its commercial property management and leasing services for your landlords you can get a free ebook right here at http://www.commercial-realestate-training.com/

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents to improve their market share, negotiation skills, listings, and commissions.

Original article

Commercial Property Management Services

Maintaining your commercial property properly takes a lot of time and dilerberation in order to complete the day to day hassles that come along with property ownership. Many business owners overlook the effort that is needed to put forth to simply keep the foundation running smoothly and only think about the big picture. It takes no more effort than hiring another employee for your company to inquire about property management services and get back to that worry free mindset you initially had when opening the sprouting asset. After all, what is the point in owning your commercial property if you have no time to reap any benefits between handling the finances and day to day struggles?

Commercial building owners have much more responsibility than your common clothing or grocery store owner; therefore, the help of a property management service is essential and in many circumstances deemed mandatory for the property. The 24 hour a day commitment to tend to any unexpected arising problems will be the back bone in your structure. The space to allow you a family get away or a dinner out with your closest friends while having full confidence that the management team will be on immediate duty upon any direct notification.

More involved services than the promise of keeping all the parts of your commercial building functioning adequately that they provide are the attendance to all board meetings on your behalf to make sure that the structure is accomplishing exactly what you want. Not only are your thoughts crucial in these lengthy meetings, but so are those of the people who are present. Composing these ideas and thoughts for improvement from the people and analyzing then relaying them to the commercial owner makes for an ideal business. Among the ideas of all there will be positive ones, but also irrelevant non-beneficial ideas that can be sifted through in these meetings as the management services allow opportunities for bids and making sure every complaint is recognized.

Without a head present that is taking control of the board meetings and working behind the scenes with the finances the structure can go array. Commercial property management services vouch to enforce all predetermined rules and keep an eye out for those overlooking the set guidelines. These management services stay in such close contact with the property that you will never have to worry about things getting over looked - big or small.

Original article

Residential and Commercial Property Management Services

You smile with satisfaction as you leave your commercial property as a memory from just a year prior of this engagement floods your mind. Last year at this time you were leaving your stressful job to come home to manage the finances and rummage through piles of complaints and suggestions. Not to mention having to come home to your residential property and deal with your household and neighborhood duties as a homeowner. Upon discovering a property management service for residential and commercial areas you were finally able to leave work without taking it with you throughout the rest of the evening.

These services graciously offer home owners, commercial property owners, or both the opportunity to pass on the paperwork and create the ideal place to live or work in. When you are working toward your daily goal, they are working to strive for excellence in the community. There is never a moment of the day these services aren't available for your attention. There is no way to predetermine whether something will need immediate repair so property management services have no hesitancy to commit to their 24 hour service any day of the week.

In order for these services to complete their duties to the fullest and understand what the community desires they attend all board meetings to get a full grasp of the needed improvements. They will organize meetings and undoubtedly listen to every person involved. By creating bids for individual topics, each suggestion is adhered to equally and fairly. They encourage your ideas and invite you to share them so they can help to voice them in meetings that you may or may not be able to attend.

While dealing with the aspects to create an ideal environment for all they will also use their time to manage the financial portion that comes with property management. When improvement suggestions are passed there are numerous documents that call for attention which will all be handled by these professionals. Charts are produced of the financial welfare and are made easily accessible to allow the community to decide what can be afforded.

No commercial property or residential owner can make sure all regulations are being abided by at all times. Having all rules followed by the people is crucial to a successful community. With the help of these services, an outsider can be the enforcer and leave you to enjoy the property you have worked so hard for.

Original article

Commercial Property Managers - Understanding Landlord Psychology

When it comes to managing and leasing commercial or retail property, the relationship you as the agent achieve with the landlord is critical to the end result. To a degree this means that a full understanding of the landlord thinking processes and targets will help you achieve better property management and leasing outcomes.

Every landlord is unique and special when it comes to targets and requirements in property performance. At the early stages of your appointment as the leasing agent or the manager, it is essential to interview the landlord and understand their requirements in the following:

Monthly reporting processes including financial and lease managementIncome and arrears management with sitting tenantsLease strategies relating to sitting tenants seeking to renewFees and commissionsLease strategies relating to new tenants considering a move to the propertyMaintenance and expenditure procedures relating to building operationsAuthorities to act on tenant matters and property performanceCommunications processes with in standard and special activities within the property

Having worked with some very challenging landlords over the years, I know that most failed relationships are generally centred on the managers inability to understand or service the landlords requirements. Unfortunately some property and leasing managers treat every landlord in their portfolios the same way. This does not work; unique reporting systems, controls, and communications are always required.

Difficult Landlords Do Exist?

It can be said that some landlords are particularly difficult and the targets or demands are unrealistic however this is the exception and not the rule. Most landlords simply have their own plans and systems to be integrated into the management and leasing process. This is where the professionalism of the manager is essential in understanding the landlord thinking processes and targets.

In the case of every new property management or leasing appointment, the handover procedure for the property should incorporate a number of meetings with the landlord to address the above items. Those meetings should define the way the landlord wants things to happen and how they see the property performing for them over the coming years.

Get to the Source of the Problem

I like to think in reverse when it comes to a property that is struggling with management or leasing issues. Start with the landlord and property manager relationship. If the levels of understanding and cooperation are lacking then in most cases it is the property manager that is the source of the issue. The property manager may be overworked or not suitably skilled; generally a change of property manager will fix the problem.

If you want more tips and ideas to help your commercial property management business you can get a free ebook right here at http://www.commercial-realestate-training.com/

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents to improve their market share, negotiation skills, listings, and commissions.

Original article

Commercial and Retail Property Managers - How to Talk to Your Tenants and Why Do It

Over the years I have seen so many commercial and retail property managers create problems for themselves simply by not talking to their tenants on a regular and frequent basis.

You see some property managers get so wound up in the events of the day and the landlord that they tend to overlook their tenants and the fact of keeping in touch. This is what will happen then:

Tenants get to talk to other agents when lease end or termination is nearThe tenants will not tell you of building issues or maintenance problems.When you do talk to the tenants they are not as trusting and open on issuesThe tenants talk to each other and undermine the property managers authority

The fact is that tenants only have one person to talk to in most cases, and that is the property manager. Without this connection or link the whole property management process gets that much harder.

One important fact should be added to this observation. Retail tenants need much more connection and communication than those in office or industrial property. Given that retail tenants are operating their business from the tenancy, any communication is good from their point of view.

Set up a System

So how can you communicate with all your tenants? Today we have email and other technology tools to help us, but nothing replaces the face to face approach and the direct telephone call. Meeting with all your tenants regularly is just so important in the management of the property.

As the property manager, you are the front line of the landlord and the property performance; everything should go through you and be controlled in that way. If anything goes around you or bypasses you, then the whole game is lost; soon you have a property that is out of control.

Here are some ways of keeping in touch with your tenants in all your buildings:

Create a property update or newsletter to be sent by email to all your tenants around the middle of the month (that is when they are less busy). In this despatch you can send information about the property or the local area. You can also update the tenants in bulk of general building matters.
At least every 3 months send the tenant a questionnaire relating to their needs of occupancy, expansion, contraction, or relocation. Give the tenants 7 days to complete the questionnaire and then arrange to meet with them to discuss things of concern.
Any maintenance concerns should come to you via a standard form from the tenant. It can be faxed or emailed, however the tenant should receive an acknowledgement of the form being lodged and then given feedback of the maintenance updates.
Watch the tenant's leases to make sure that the critical dates are enacted well before the due dates. Wise process says that you should be working 12 months out from the critical date and then communicating with the tenant as all dates get nearer.
Every letter or email from the tenants on any matter should be responded to in a timely way. If the matter is ongoing, they should be kept up to date.
Any verbal comment of a critical nature between the tenant, the landlord, the property manager, or others, should be supported with written acknowledgement. It is surprising just how important this becomes in the future when disagreements happen.

Here is one important fact that will evolve with uncontrolled tenants; the tenants will talk to each other if they cannot talk to the property manager. This internal gossip becomes a cancer on the performance of the property. Many a property manager has been destroyed by tenants that have been overlooked or not communicated to.

Get to know your tenants, it's a wise move.

If you want more tips and ideas to help your commercial or retail property management systems you can get a free ebook and tips right here at http://www.commercial-realestate-training.com/

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents to improve their market share, negotiation skills, listings, and commissions.

Original article

Commercial Property Managers - Month End Reporting Tips and Processes

Like it or not the month end activity for property managers is here to stay; it is a bit easier if you are using a reasonable software package but diligence and focus in the month end process is still required from all property managers. When you make slip ups and mistakes, it is really embarrassing to the agency and landlords soon lose confidence in you. In this industry, inaccuracy and poor performance in property management are not tolerated by landlords (and correctly so).

So what can you do? Take a deliberate focus on being the best you can be as a professional property commercial or retail manager.

So here are some of the main the rules for property managers at month end:

Check all your income statements to ensure that the income has been correctly coded within your accounting system
Make sure all the income has been correctly raised in accordance with the leases and the tenancy schedule
Check the lease status of all your tenants and make sure that you are not to be impacted by forgotten or current rent reviews, lease options, lease expiries, renovation dates, insurance provisions, notices or obligations to or on the landlord or tenants under any special condition of the lease, vacancies, relocations, refurbishments, and maintenance matters.
Check that all invoices to tenants for current rent and outgoings are correct and are paid up to date
Look for any arrears and aged debts that are active or need to be addressed
Check the tenancy schedule to ensure that it is up to date and correct in all respects
Review all matters that are outstanding with the tenants and provide an update to the landlord of current status
Make sure that any changes to tenant contact and communication are correctly recorded in the monthly report for the landlord client.
Check the expenditure report against all invoices from contractors and make sure they apply to the subject property and landlord
Check the income and expenditure report against budget to ensure there are no overruns
Report to the landlord about current tenant mix strategies and any existing lease negotiations that are outstanding
Give the landlord a commentary of maintenance activities over the last four weeks and add to that any unusual expenses that will impact their cash flow in the coming weeks or months beyond that which exists in the current property budget.
Do not under any circumstances send out financial or written reports that have not been checked and cross referenced to the master records.

Some may say that month end is the most difficult time when you still have to manage property, tenants, and maintenance, whilst your reports are being run and prepared for landlord dispatch. The secret to the process is to use a month end checklist that is relative to the landlord, the property, and your office management systems.

In that way you can keep your month end activity fully under control and moving ahead. Soon the landlord will think that things are so good, that trust and future relations between you will be strengthened. You will be the property manager of choice.

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents to improve their market share, listings, and commissions. You can get a free ebook of real estate tips and tools right here at http://www.commercial-realestate-training.com/

Original article

Benefits for Buying Commercial Real Estate

Buying commercial real estate can an exciting and profitable business. By investing in commercial properties in the Carolinas you give yourself a long-term revenue stream. Here are just a few benefits of commercial real estate!

1.) Multiple revenue streams: The great thing about commercial real estate is that you can have multiple revenue streams. The property itself can gain value and be resold, you can rent or lease to get a monthly income, and you can use the space yourself as an office out of which you can run your business.

2.) Diversification: It is important to keep your investment portfolio diversified. Investing in Commercial real estate is a great way to add additional properties to your investment portfolio, and having commercial investments adds some variety and options for your portfolio. Commercial real estate properties can be range from apartment properties to office buildings.

3.) Properties are currently available at a great price: There is plenty of commercial real estate available in almost every part of the Carolinas, and the poor market conditions have left some great deals in its wake. Take your time when choosing the right property and you can certainly find prices poised to rise.

There are many benefits to getting into commercial real estate, but like with any type of investing, it is very important to gain as much knowledge as you can before making those tough decisions about what to invest in.