|Property Manager under Stress??|
If you work in commercial real estate as a property manager, the time management issues that you strike every day will be challenging. If you cannot control them then the result will be stress and frustration. That will lead to an unhappy time in your career and underperforming properties.
Here are some tips from our Bulletin for Property Managers this week.
It is interesting to note that the property management division in a commercial or retail agency is usually regarded as the ‘too hard’ part of the business; many agent principals overlook the essential ways to run the division and make it grow. If they had negotiated the right fees in the first place with each management, then the situation might be a fair bit different.
Do Agency Bosses Understand?Many office principals do not understand the complexities and opportunities that lie in the property management area. They prefer the bigger commission hits that come from sales and leasing; whilst that is understandable, it is wrong. It can be a long time between sales, and property management can solve that cash flow issue.
It is an established fact that a good property management division will support an agencies listings and commissions over the long term. They take the ‘bumps’ out of the market and the dips in commissions. They will also supply the agency with quality controlled sales and leasing stock.
When you list a property into your management section, you really do need to think ahead and handle all the fees that can come out of the appointment.
What Fees?Those fees will include:
• Leasing to sitting tenants
• Leasing to new tenants
• Sale of the property at the right time
• Management of the financial versus the physical parts of the property
• Rent collection
• Arrears collection and recovery
• Grow strategies for the tenant mix
• Maintenance management fees
• Property inspection fees
• Attendance at court for disputes
• Lease renegotiations with sitting tenants
• Assignment negotiations (a tenant fee)
• Subletting documentation (a tenant fee)
• Budgeting the property annually
Have you got all of these bases covered when it comes to a new property management appointment and the fees that you require?
Some agents charge management fees that are far too low; they confuse the work load and work type of residential property against commercial or retail property. They also try and ‘buy’ the listing on the premise of low management fees but future sale commission opportunity. If that is the case you should share your sale commission or fee across into your property management division.
Advanced Property ManagementThe management practices involved in commercial and or retail property are far more advanced and complex. You need good property managers that are well trained in the differences in that. When you have a fair fee structure in the property management division you can build and support a group of expert property managers; over time they will attract more commercial and retail business to you.
So let’s go back to the issues of time management. A portfolio of properties with correctly set fees will be a challenge. Make sure that you set your management fees based on workload for each property and landlord. Forget the percentage of rental approach when setting your fees; some landlords are intense when it comes to the reporting requirements in commercial real estate today.
On a final note, many property managers know far more about property performance than sales or leasing executives; interesting isn’t it? Devote the right fees to these specialist people in your team and the time management pressures will diminish.
If you want some more tips for commercial or retail property managers you can get them here.