Hiring the right property management company for your commercial property is one of the most important decisions you have as an property owner. An excellent property management company will stabilize and improve cash-flow while controlling costs and a poor manager may do the opposite. Here are tips for hiring the right commercial property management company for your property.
Progress Reports and Financial Statements: The property manager should improve the property operational and financial efficiency by using software to not only track revenues and expenses but also maintenance and work orders. Good property management companies often send monthly reports to owners that include a rent roll of who paid and who did not, a check register with all expenses and revenues with a beginning and ending bank balance, and a year to date profit and loss report.
Property Management Fees: Many commercial property management firms charge between 4% and 6% of the rents for managing the commercial properties. Be sure that you know what the fee percentage is based on such as base rent only or gross rents received or some combination thereof.
Tenant Satisfaction: The best property management firms know that one of the best ways to maintain or even increase property income is to keep existing tenants from leaving. Maintaining a positive tenant relationship with the property manager involves ongoing communication, satisfying reasonable complaints and being proactive. It can be challenging and expensive to find new tenants for commercial properties with spaces often vacant for months before signing a new tenant.
Detailed Knowledge of Lease: Often lease provisions have not been followed such as missed rental rate increases and incorrect reconciliation of common area maintenance charges. In medium to large size properties, there are often variations of leases for different tenants so it’s important to have a clear understanding of each lease such as what specific expenses are to be included in common area maintenance charges.
Certified and Experienced: Inquire about the skills and experience of the manager you want to hire . The property manager should be local, experienced, and licensed as real estate agents. Often the most dedicated commercial property managers are also certified as Commercial Property Managers(CPM) from The Institute of Real Estate Management(IREM) which is an international community of real estate managers dedicated to ethical business practices.