Owning and leasing out a commercial property in Australia can take up a lot of your time and can be challenging to manage if you’re juggling it with a full-time job. This is because the task requires more than just finding tenants and collecting rent every month.
It’s with this in mind that property experts recommend enlisting the services of a certified and experienced property manager. The commercial property management Essendon property owners rely on will assist you with all the legalities associated with managing your commercial property leases, as well as handle tenant relations. This post shares a few key tips to help you find the best property management team.
What is Commercial Property Management?
In an Australian context, commercial property management (CPM) involves the strategic maintenance, administration, and leasing of income-generating real estate with the goal of maximising the owner’s returns. For the most part, this responsibility also covers tenant management (lease negotiations and rent collection), compliance with local laws, and facility management.
In short, these professionals handle the day-to-day running of your commercial property. By having a designated person for the tenant to liase with, there’s no need for you to be overwhelmed with tenant issues and queries.
Professional Commercial Property Management Makes All the Difference
When you’re shortlisting potential commercial property management companies, the goal should always be to look beyond basic rent collection to find a specialist who can safeguard your investment.
They will also need to manage complex commercial leases and help you maximise returns. With this in mind, we’ve listed a few key tips to help you find the perfect commercial property manager.
Always Look for Industry-Specific Expertise
When it comes to finding someone to manage your property on your behalf, you’ll want a person or a team that specialises in commercial property management. Preferably, they should also be an expert or have working knowledge of the regulations for your property’s specific industry. For example, managing a shopping centre property may be different from overseeing a buzzing chemical factory.
The golden rule here is to always opt for commercial property managers. While you may think real estate management is the same all over, commercial property management differs greatly from residential management. The main reason for this is that CPM involves more complex leases, longer terms, and in some cases, higher-stakes maintenance. This means that you’ll want an expert who specialises in commercial, industrial, or retail property management.
Check Licensing, Qualifications and Reputation
As with any other business transaction, it’s crucial not to take any dealings with a prospective CPM company at face value. Our experts stress that it’s essential to check and verify all aspects, such as qualifications, licensing, and their overall reputation in the industry.
Here, you want to keep in mind that each CPM company should be licensed in their respective state. For instance, New South Wales may require a Fair Trading licence, while in Victoria it’s mandatory to be part of the Consumer Affairs.
In addition to a basic CPM licence, a prospective company should also have affiliations with the Real Estate Institute of Australia (REIA) or the Property Council of Australia. It’s a good idea to seek property managers with relevant working experience with whom you can build a long-term relationship. Be sure to check online reviews from previous tenants and other owners. This will give you a broader perspective of how similar properties have been managed.
Compare Fees
The next step in your search for the perfect CPM company is to compare fees and annual costs. On average, commercial management fees typically range from 5% to 12% of the gross rent. This varies, depending on the state and asset size. Here, you want to look out for fees with lower percentages, as these often hide the highest costs.
When comparing various agencies, it’s a good idea to ask for a full fee schedule, which includes the following:
- Leasing and letting fees: This is usually 1 to 2 weeks’ rent for a new tenant.
- Lease renewal fees: Typically, a flat fee or a percentage of one week’s rent.
- Maintenance markups: Check if they add a 10%–15% margin on top of contractor invoices, as this will affect your maintenance budget.
- Reporting fees: Assess costs for monthly statements or annual tax summaries.
Look for a Company With a Strong Local Presence
In the current real estate market, having access to localised data is essential. This means that you want a CPM company that is not only established in the area but is also familiar with local trends and commercial estate demands.
Here, you want a CPM that has the following:
- Vetted vendor networks: Established relationships with local tradies such as plumbers, electricians, and fire safety contractors who offer competitive “preferred” rates
- Leasing leverage: Connections with local tenant advocates and businesses looking to expand
- Regulatory awareness: Extensive knowledge of state-specific legislation
Final Thoughts
Commercial properties are among the most significant financial assets an individual can own. This means that it’s crucial to find a management company that has sector experience, transparent fee structures, and local presence. This will go a long way toward ensuring that your property is not only well-managed but also performing even when you’re not there all the time!
