The purchase and ownership of commercial property, including office buildings and shopping centers, is a time-honored way of accumulating wealth. Commercial tenants sign leases for significantly longer terms than individuals renting an apartment, virtually assuring you of a reliable return on your investment for an extended period.
The significant word in the previous sentence is "virtually" because building maintenance and tenant payment problems do occur occasionally. A commercial landlord must be aware of building codes and OSHA regulations in addition to hiring a knowledgeable maintenance crew to make all necessary repairs. Hiring maintenance personnel makes you an employer with specific obligations in addition to being a commercial landlord. This is why many property owners prefer to contract with a commercial property management company.
These are some of the immediate benefits you'll enjoy once you delegate the daily chores of management to a team that is specially trained for this task:
Tenant Qualifications: A commercial management company does a thorough background check on prospective tenants. For example, although it is fine to rent to new businesses, a management company weeds out those without sufficient sales or clients to stay afloat. There is a big difference in cash flow between two accountants with clients who want to open a storefront and a new sandwich shop that depends on customers walking through the door.
Tenant Reputation: A management company checks with previous landlords to ascertain if the business was a good tenant. This includes paying rent in a timely manner, not having multiple code violations, and returning the premises in a clean and undamaged condition at the end of the lease.
Lease Negotiation: A management company handles all the work involved with getting the lease signed, collecting deposits and rent, and ensuring the tenant understands he cannot modify the premises beyond the terms of the lease.
Maintenance Issues: All commercial buildings require routine maintenance, from cleaning the gutters to removing heavy snow off the roof. Emergency repairs can happen at any time, such as a burst pipe or a broken elevator. Commercial maintenance companies have their own staff of maintenance employees to handle all types of problems.
Time to Generate More Wealth: Since your time won't be wasted on daily maintenance issues, you'll be able to concentrate on professional activities that generate additional wealth. Many landlords do not stop with the purchase of their first commercial property. They continue in their quest to own multiple pieces of prime real estate. A property management firm is part of the equation to accumulating more assets since it gives you the time to pursue profitable activities.
For help managing your commercial properties, contact a company like Bradley Scott, Inc.