The commercial properties in your portfolio are only as good as the revenue they produce. Commercial property management isn’t a “set it and forget it” venture. You have to be proactive about filling vacancies and providing exceptional support and service. Are your commercial properties as profitable as they could be? Let’s explore three key ways to improve property and portfolio performance and increase your ROI.
Be Scrupulous About Tenants
You can’t maximize your return if you’re dealing with a revolving door of tenants. Likewise, tenants with late or missed rent payments due to business woes can severely impact your cash flow. And if you have to evict someone, add some extra time and money to the mix. While there’s no way to ensure perfect tenants, you can significantly lower your risk by being meticulous about who you decide to lease to.
Assess the performance of the tenants you currently have in your portfolio to identify which ones are delivering the most value. This should provide you with a better picture of who you’d like to fill future vacancies with. This strategy is obviously not foolproof, but it’s data-driven, which means it’s much more likely to produce a successful outcome.
Get to Know Your Leases
A strong, solid lease agreement is one of the biggest components of a healthy landlord/tenant relationship. It protects both parties, sets expectations and removes ambiguity that could otherwise result in conflict and disagreements.
Make sure your leases are clear and comprehensive, covering every important base before getting tenants to sign off. And, more importantly, be sure you fully understand what your leases contain and what your rights are. The more informed you are, the better you’ll be able to optimize your portfolio.
Focus on Efficiency
Another way to boost your commercial portfolio’s performance is to focus on establishing processes that prioritize efficiency. This is beneficial, both from an internal operations standpoint, as well as from a tenant experience perspective. Plus, better back-office operations can increase the likelihood of renewal.
Commercial property management software can be an absolute game-changer when it comes to boosting efficiency. Automating tasks and processes will speed up output and enable your staff to accomplish more with less. Likewise, online portals and other self-service functionality empowers tenants, improving satisfaction and promoting retention while saving you time.
Commercial property management can be a highly lucrative business endeavor, but it takes work. The three tips above should help you optimize your commercial portfolio and maximize your profitability from start to finish.
