Many business people who invest in commercial property often decide to manage these investments themselves in order to save money, but this is not always the most cost effective way to go.
Firstly, you need to have a very good understanding of the legal implications regarding landlord/tenant contracts and what is expected of the person or company managing the property.
Disputes can and do arise on occasion, be it about the rental, increases, repairs and maintenance or even misuse of the property. At this point, you could not only find yourself dealing with a difficult tenant and having to answer frequent calls to repair this or upgrade that, but you will have to find time to fit this into your already busy day. Taking the bigger picture into consideration, it is essential to weigh up the pros and cons before making the decision to go it alone or pay a property management agency to look after your commercial rentals for you.
You could benefit from just one phone call
Jason Gregoriades, a member of the Rawson Property Group’s Commercial Business Development Team in Cape Town suggests that it could greatly benefit a property owner to contact a brokerage and learn what services they offer. “Agencies will have greater capacity to provide your property with greater time, attention and professionalism,” says Gregoriades, “allowing you, the property owner, to focus on and assess new potential investments.”
What can the property management agency do for you?
Property management agencies are accustomed to dealing with all facets of leasing out a property and can deal professionally and efficiently with whatever problem may arise, without putting undue stress on the landlord. They are also fully informed with regards to the rules pertaining to rental contracts, also dealing with all aspects of collecting, holding and returning security deposits as well as rent collection and enforcement. They follow up on late payment, taking the necessary steps to send letters of demand, where required, and eventually arrange for eviction should that be the only final solution.
“Receiving a phone call from an irate tenant because a pipe has burst and is flooding the premises is not pleasant,” says Gregoriades, “and it is even worse when you do not know a good plumber who is prepared to come out at short notice to fix the problem for you. It is worse still when you receive an enormous bill after the job is completed.”
A property management broker has a good working relationship with all relevant reputable contractors, who are willing and able to do the repairs when needed, at the best possible price. Thus the problem is solved in a shorter time, in the most efficient way, with the least cost and inconvenience to you.
A property management broker knows that the best way to secure and keep a good tenant is to keep the property in tip-top condition, so they will recommend upgrades and preventive maintenance when their inspections show that it will increase the value and desirability of your property. In this way they help you to keep your investment in good condition, ensuring you of content tenants and a regular income with no unpleasant surprises. They are also up to date with the current rental prices achievable in the area, thus being able to advise you if your rental is above or below the norm, which would, in the former instance, make your property less desirable to a tenant, or in the latter case, would mean your profit would be less than it could be.
Committed and passionate
“Agencies which manage commercial property will be committed and passionate about your property”, says Gregoriades “knowing that they’re in it for the long run, and have the risk of losing you as a client in the future if they don’t meet good service and product levels, means that the management company will be incentivised to provide you and your property with the best possible service, building and developing a relationship with you.”
“By hiring a company to manage your commercial property, you develop a relationship and history with a particular service provider, meaning that in times to come, when you need other, varied assistance from a property company, you’ll be categorized as a preferred client, already having experience with the company.”