The decisions necessary to invest in commercial real estate are not just around finances. Once you purchase the property, what’s the next step? Are you prepared to handle the day-to-day maintenance, logistics, and upkeep? If you go the do-it-yourself route, will the building and the owner-tenant relationships suffer? Hiring a property management company takes CRE investing to another level.
A good property manager or management company saves the investor time, money, and stress, especially if you own more than one property. Here are five benefits a property manager can add to a CRE investment:
1. Experienced managers bring with them a trunk full of expertise and knowledge, especially around leases. With an understanding of lease clauses and terminology, they help both sides manage the components of the lease. Plus, with multiple properties, different rates, timelines, terms, and rules can be a lot to juggle. Having a property manager allows the investor to get out of the weeds and focus on building more wealth and opportunity.
2. If you’ve ever been called in the middle of the night because of a frozen pipe or early morning for snow removal, you know what a hassle it is. Property managers keep on top of surprise issues and scheduled upkeep. Experienced managers know people who can get the job done effectively and efficiently and have built relationships with vendors over time. They have an HVAC guy, a plumber, or roofing company in their contacts, ready to call. That saves you money, stress, and time.
3. Tenant communications––and all that goes along with those interactions––can be time-sensitive, time-consuming, and sometimes challenging. Having someone focused on tenants and their needs is very helpful for the owner and makes for a happy tenant. I know it helps me!
4. Knowing things are running smoothly with your building often allows you to broaden the geographical area of your investments. If you’re thousands of miles away, you won’t have to worry. It’s the property managers job to look after the building, work with brokers to fill vacancies and handle lease renewals, and take care of the tenants for you. They become the bridge between owners and property needs, tenants, and brokers.
5. Property managers track spending and income, help negotiate maintenance/upkeep contracts, ensure rent is collected in a timely manner, and track utilities. They have an on the ground understanding of what’s happening to the property financially. You definitely want to make sure you’re getting the most out of your investment.
Ultimately, the cost of bringing a property manager onboard can offset the financial and emotional cost of handling a building yourself. They’ll have a lot of responsibility, so it’s important to find a person or company with a good reputation and has your trust.
Jeff Salzbrun is the owner/broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in thousands of sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.
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