Property Management Ideas

Here are some ideas to assist in property management:

Space Sharing Executive Suites. With the new revolution in communications, building owners must keep up with the changing needs of the corporate tenant. Often the larger, well-organized businesses do not need the space that was necessary just a few years ago. Computers, faxes and e-mail have substituted for leased office space. Managers are more willing to grant favorable lease terms to operators of shared space. The operator sometimes receives a monthly management fee for operating the shared space plus a portion of rent revenues over a certain amount.

Solving Tenant’s Needs

Tenants in an office suite are offered a private office within the suite that has a receptionist, secretarial help, conference rooms and other amenities. This can be a big saving for small space users or users who need a small office for only a short period of time.

Another user is from the large corporation that needs small branch offices in different parts of the country. Other users might be individuals who need a private space for investment or other work activities as well as professionals such as attorneys or accountants who work primarily away from their offices.

Existing Leases

The concept of shared space can be used by companies that have excess space that cannot be leased in its entirety. The company’s existing facilities such as copier rooms, computer rooms, cafeterias already are available. Any income from this type of shared space can be nearly 100% profit.

If this is space that is leased by the company rather than owned space, the lease must be reviewed carefully to see if a sublease could violate the sublease/assignment clause of the lease.  

Renting To The Right Tenant. Property managers must always think about the type of tenant that is most likely to reside in that particular building. For example, when apartments in a project rent for $10,000 to $14,000 per year, tenants will be concerned primarily with shelter. This means a safe, clean, efficient building but without frills and amenities.

On the other hand, if the apartments will rent for $26,000 to $32,000 per year, or more, tenants typically expect and demand much more than just shelter. These tenants want a luxurious life-style, and that means the building should contain a health club, a swimming pool, a private park, and similar conveniences.

In the lower priced units, investors will concentrate more on the basic design and layout of each apartment and on the reliability of such things as the elevator service and the garbage disposal. For common areas, the workings of the lobby intercom system and the location of the mailboxes, for example, are prime considerations.

However, at the more fully equipped building, the investor faces increased costs of construction and maintenance of areas that produce not direct rental income. If these life-style areas become the slightest bit shabby, it can lead to tenant dissatisfaction and vacancy. The well-equipped, well maintained building usually has a very low vacancy rate. In fact, it often has a waiting list of prospective tenants that assures full occupancy for a long time in the future–a good sign for investors.

The Upkeep On Your Rental Property. Keeping your property in top condition is not difficult if it is a continuing effort. There will be a plan in place for making ongoing improvements by investing a portion of each year’s income. Failure to do this will result in a neglected property.

Many investment properties suffer from improper care and neglect. Getting started on the program of enhancing the value should focus first on three areas. These three will immediately make an office or apartment building begin to stand out:

• The lobby and interiors of the building must be perceived by tenants and visitors as something unique.
• The outside appearance from the street must give a favorable impression to passers-by, both pedestrians and those in vehicles.

The Improvements

Here are a few improvements that usually will change the appearance of an office or apartment building quickly:

• A new lighting system will enhance the nighttime visibility and take advantage of any nighttime traffic. The building will be more visible from a distance.
• In older buildings, the elevators often are slow and reflect the age. Without changing the entire elevators, an electronic control system might be added, producing a swifter and more consistent service.
• Replace the wall coverings on each of the floors to produce a lighter, cleaner image.

It is seldom necessary to “do” an entire building all at one time, disrupting tenants and running up big costs. Try an improvement on one floor to see how it works and how cost effective it is. If it makes sense, phase in the improvement over a period of months or years