While commercial real estate can be extremely lucrative, many investors or owners don’t consider how they can cut costs to increase potential revenue with little to no impact on their tenants. Whether you rent out office units or apartment, no matter the property type, there are certain steps you can take to ensure success in your real estate endeavors. Even if you don’t directly handle the property management responsibilities, encourage your manager to look into these cost-saving measures.
Commercial real estate owners incur one of the biggest expenses when units remain empty for extended periods of time. Each day a person stays in your apartment equates to a portion of their monthly rental fee. Even a few days empty causes a considerable loss.
Combat this profit loss with a few simple best practices. At the risk of sounding obvious, remember that to fill your space, people need to know it’s open. Don’t waste time planning a million open houses that you never told anyone about. Make sure you put the same effort into marketing that you put into preparing and showing a property. In the technology age, there are plenty of sites to post open houses or rental listings for a small charge if any. Be sure you get the word out.
The work doesn’t stop when people walk through the door either. Be sure to be attentive to interested parties and create a sense of urgency. People want a responsive landlord. As one blog puts it, “By showing attentiveness, you demonstrate to prospective renters that you’ll be attentive if something needs fixing.” It’s also only natural that people become more interested when they think something is highly prized, including property.
Tenants aren’t the only ones who find moveout painful and disenchanting. Turnover comes along with repairs and maintenance, and while security deposits are intended to cover the majority if not all of these expenses, it still takes time and effort. The average cost of turning over a unit isn’t impacted by how long a tenant stays either.
As Blake Hilgemann writes, “Some people will inevitably leave because they are moving across the country or buying a home, but the last thing that you want is to lose your best tenants to the landlord down the street, dealing with the expense of acquiring a new tenant and lost revenue in the vacancy.” Many occupants aren’t determined to leave because they found something nicer. If anything they look for a reason to stay because they dread lugging all of their stuff out just as much as you do. Create incentives for them to stay and recommend other tenants for that matter if you have vacancies to fill. It may cost you upfront, but this method can really pay off in the future.