You’ve finally stepped into the exciting world of commercial real estate by purchasing your first commercial investment property – congratulations!
Of course, as you’ll quickly find out (if you haven’t already), owning and managing commercial property is vastly different from residential ventures. Whether it’s new regulations to follow or unfamiliar procedures for leasing tenant spaces (and everything in between), the transition to optimising your new investment can be challenging. Starting on the right foot with proper commercial property management is key.
In this guide, we’ll help you arm yourself with the knowledge you need in the vital early stages of commercial property ownership to ensure success down the road.
Professional Property Management vs Self-Management
Of the many decisions to make in the initial phase of commercial property ownership, your biggest will be whether to self-manage or outsource your commercial property management to a professional property manager.
Here are some factors to weigh up:
Available Time
Are you prepared to set aside time to oversee your property management details on top of your other personal, professional, and ownership obligations and duties?
There is a significant upfront time investment while you get new systems up and running. You should also expect to set aside time regularly for dealing with maintenance and repair requests, conducting property inspections, tracking your property performance in line with market trends, and handling financial and legal paperwork.
Relevant Expertise
When assessing your commercial property management needs, make sure you are honest about your capabilities. Do you have experience with commercial leases, budgeting, maintenance, and local laws for the property type? How well do you understand the current state of the Perth commercial property market? It’s better to be conservative about your expertise level than to overestimate and risk suboptimal performance, financial stress, or even legal issues. The right property management partner will fill your knowledge gaps. Focus on your strengths, assemble a skilled team, and set clear expectations. That’s the formula for seamless management and satisfied tenants.
Cost Considerations
Self-managing may seem like the most cost-effective option. However, consider that having less experience in leasing, maintenance, budgeting, and local laws may result in money being left on the table. You may also find that day-to-day tenant issues drain your time and energy, which could be better spent on more profitable (or enjoyable) priorities.
Professional commercial property managers offer systems and market experience to maximise rents and occupancy through responsive tenant relationship management, expert lease negotiation, and proactive property maintenance. Plus, you will benefit from ongoing support with legal and financial matters, simplifying your tax, adhering to local regulations, and ensuring your property is performing at its best based on commercial property market trends.
Essential Systems to Establish
Regardless of whether you choose self-management or have a property manager in place, key foundational systems need to be established before you can confidently lease your property.
Think of these as the core infrastructure empowering effective ongoing management of your new asset:
- Accounting Procedures: How income, expenses, budget tracking, and financial reporting will be handled.
- Maintenance Protocols: System for handling tenant repair requests, scheduling services, and addressing emergencies.
- Leasing Templates: Professionally formatted lease templates aligning with state/region commercial tenant-landlord laws.
A key benefit of professional commercial property management is that you’ll be gaining immediate access to established systems that have been refined and improved over many years of managing commercial investment properties.
Meanwhile, if you choose self-management, you shouldn’t expect to conjure effective processes overnight (unless systems existed with the prior owner). You’ll need to take a methodical approach to establish foundations first that you can progressively build upon over time. Start with essential items like tenant communications channels, maintenance request procedures, budget templates and rental collection workflows. Once those core operations processes are smooth, you can move up the value chain to refine areas around lease abstracting, vacancy filling, capital planning and vendor management.
With a gradual, disciplined strategy, self-managed properties can also achieve increasing procedural optimisation. The main difference is commercial property managers have already put in the hard yards around developing reliable playbooks.
Ensure Property Compliance
Before you lease out your commercial investment property, you must check that the property is compliant with local regulations. Numerous regulations apply to commercial properties in Perth, including building codes, zoning limitations, public health mandates, accessibility standards, environmental acts, and numerous landlord-tenant laws. The consequences of non-compliance can range from hefty fines to legal action.
With so much to track, lean on professional guidance when you first acquire your property, so accountability gaps don’t form. Contact us today to discuss the management needs for your new commercial property.
Ongoing Property Management Considerations
Don’t lose sight of the longer-term planning and ongoing management a commercial property manager is expected to undertake. Expect regular obligations such as:
- Financial Oversight – Monthly or quarterly operating statements, plus preparing annual income/expense budgets.
- Tenant Management – Handling repair/service requests, addressing lease renewals, and ensuring satisfaction.
- Property Inspections – Completing rigorous walk-throughs checking building conditions, system operations, and emerging issues.
If you’ve opted to self-manage, it’s worth periodically revisiting your original decision whether to self-manage or hire an external property manager. Scales tip over time, and transitioning to a professional manager specialising in commercial property can vastly simplify your property management demands.
Get Started on the Right Foot with Vast Commercial Property
With the right foundations and support team in place from day one, commercial property ownership promises rewarding long-term passive income and asset appreciation. However, the key is starting on the best foot possible.
Led by commercial property specialists Eddie and Greg, Vast Commercial Property offers tailored guidance and systems grounded in decades of Perth market experience.
Contact us today to discuss your investment property goals and get pricing for expert commercial property management.
