How to Provide Quality Commercial Property Management Services |
Posted: December 17, 2018 |
Commercial Investment Property is usually complex in its function hence requiring a variety of skills to service. Whilst Industrial Property is more 'basic' in most ways, the attributes of an 'office' and 'retail' property are not as easy. For example the elements of property investment performance that come together in Commercial include:-
When all these aspects are considered, it is common to see a number of skilled people working in a Property Management Department of a Real Estate Agency to support the diverse needs of the portfolios. The fees of a Property Management Service can and should be reflective of the high personal involvement of the broader Property Management Team. As your business grows the list of Commercial Clients and portfolios, so also should the skills and people that support the Clients. Risk Profile of Your Investors Investors will usually have a risk profile which must be identified in early onset in the provision of your professional services. Essentially a risk profile will be high-risk or low risk. A high-risk property will be one that is aggressively rented with strategically high rental figures applying to the tenancies during the duration of the leases. The danger of high-risk profile properties is that the aggressive levels of rental pursued by the Landlord can become difficult for Tenants to support financially during the total duration of the leases. This can and will invariably lead to the collapse of the Tenants business and the creation of an unwanted vacancy. Consider this:
Some Investors prefer to take a position low risk with the establishment of more conservative rentals to produce income stability over the maximum time of the established leases. Obviously it can be said that the potential return in a low risk profile building is less by comparison to the former 'High Risk' profile property but the associated low volatility of the Tenant profile provides Investors with a stable long-term result. This means less active threat of unwanted vacancies. Commonly the less active vacancies in such a property, give the Investor a better cash flow. Expansion and Diversification Commercial Property will nearly always fall immediately into the type of category of either Office, Industrial, or Retail. Such single property for that Investor will feel the effects of any changes in the market, occupancy changes and the economy. By example, a downturn in the national economy will quickly effect businesses and hence the Tenants in any property. This can restrict their ability to trade and pay the rent. Industrial Property is the first property type to feel pressures in a shifting economy due to the direct link to small business. Portfolio expansion and diversification is therefore a useful and important future strategy to lessen the volatility that can occur when you own one property of a singular type. Wise Investors and their Agents encourage expansion and diversification of the portfolio as a means of spreading and reducing risk. This can form part of a true investment service to your Clients, positioning them more favorably on a variety of properties. Diversity for your Clients can mean stability. Obviously their financial position and available cash will govern their timing and ability to do so. Your guidance in the process is both important and professional.
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