New Investment Owners or Landlords of a commercial property can benefit from having a Property Manager. Here is why creating a Budget for your commercial property is so important.
Having a budget will not only protect a commercial property, it will also allow the tenants to continue their business or have an action in place when emergencies occur. The major aspects of budgets that Property Managers can assist financially include:
1) Creating a backup plan for emergencies and a reasonable estimate of costs.
Depending on where you live, the weather may be a hinder to your property's well-being. Having a Property Manager will ensure that costs of an environmental repair are catered to the owners budget and ensure the maintenance prolongs a buildings life expectancy. During the summer months, adding patches for leaks versus repairs for roof damage can mean differences in hundreds to thousands in costs. And especially now that winter is coming, having a snow removal contract would ensure sidewalks and parking lots are taken care of before the work day commences. Setting up the contract in advance prevents fall liability and at a lower contract cost compared to the cost of an emergency visit. Emergency or maintenance contracts set in advance while having a clear budget in mind for next year can help owners maximize their net income.
3) Making sure your property is up to code.
Too often a city code can be easily violated by not having regular maintenance to ensure all equipment are in functioning order and annual inspections are passed for the safety and regulations in the jurisdiction. As property buildings age, equipment may malfuction over time including the regular use of an elevator and emergency fire life safety lights and alarms are working properly. A Property Manager will a safeguard to ensure a commercial property is up to code and send in the right professionals to fix repairs as needed.
4) Manage Your Property's Finances.
A Property Manager is able to lift your financial burden with a proper estimation of costs and expenses planning in advance so that there are no surprises. A Property Manager will have a direct conversation and follow-up as needed to ensure the owner's budget is reasonably met while ensuring NOI. A budget report can include any maintenance or improvement plans and a list of allocated funds to each GL account. Remember though that the size of your property does play a role in how big or little expenses will be for you and your Property Manager.
Follow these tips and you will soon have a strong foundation on what to keep track of when you work with a Property Manager. If you have any questions, please reach out to our property management team Capstar_pm@capstarco.com or 301-738-7777.
About CapStar Commercial Realty
Since 1994, CapStar Commercial Realty is a full service commercial real estate firm headquartered in Gaithersburg, MD, operating across the District of Columbia, Maryland, and Virginia. CapStar assists small and large companies, from local to an expanding brand, with services in leasing, sales and acquisitions, property management, business acquisitions, consulting, and a unique specialty in restaurants. CapStar’s range of services and proprietary database help sellers, buyers, landlords, and tenants, identify real estate opportunities in retail, office, industrial, land, and condominiums.