Buying commercial property is only half the job of creating a great investment. Building a relationship with your tenant and managing your property well are just as important in ensuring its performance.
Building a relationship with tenants
The most essential step to take in protecting yourself and your asset is to build a relationship with your tenants.
Vacancy rates for commercial property in many of Australasia's biggest markets are low. However, there are always risks involved and investors remain vulnerable if they don't take simple measures to ensure they are providing an excellent service
The most essential step to take in protecting yourself and your asset is to build a relationship with your tenants. Doing so can be as simple as dropping in to talk to them and once a month, sending a Christmas hamper, or shouting a couple staff morning teas to say thank you for being great tenants. Sending a quick email including an update of what's happening in the area could also be helpful.
In sub-$5 million commercial properties it can be very easy to build that relationship, and it could be the key to ensuring your investment's security. If you do get along well with your tenants, reasonable rent increases won't be a problem and issues with the property won't cause disagreement,. Even better - if your tenant needs more space you'll be the first person they call.
Getting out ahead of issues
It's not enough to work on building a relationship with your tenant. You also must work on keeping the building in as-new condition, to reduce the risk of any issues coming up, as well as your future costs.
When you visit your tenants it's always a good idea to perform a cursory inspection of the property and note any items that need maintenance. If your tenant brings up and issues, respond to them instantly and arrange a fix as soon as possible.
It's also a smart idea to have the property inspected annually to spot issues before they become expensive to fix. After all, $500 a year on maintenance is far better than $10,000 every few years on replacements and new construction. Showing your tenants you're proactive will also keep them happy, as it will be evident you're doing what you can to provide them with a building in good working condition.
It's as simple as taking care of your tenants and your property - and if you do - they'll take care of you.
Speaking to your property manager
If you've hired a property manager to look after your investment, they'll be responsible for all the tasks mentioned above. To make sure they're able to do the job well, be careful when you're selecting a company and agent. Choose someone with a positive reputation, from a locally based office if possible.
Be very clear before you sign an agreement of what you expect from them, when it comes to building that relationship and keeping the property in good shape. If you choose well, and communicate clearly at the start of the agreement, your property manager will be well worth their fees.
As you can see the secret to managing a commercial property effectively aren't complex or difficult. It's as simple as taking care of your tenants and your property - and if you do - they'll take care of you.
