If you own a commercial property, you understand the responsibility that goes with ownership. Stresses come from many directions. You must please banks, lawyers, tenants, compliance agencies, and more. They all make demands on your money, cooperation, and time.
Forbes Real Estate Council member Alex Radosevic says, “While owners of commercial real estate come in all shapes and sizes and from varying economic strata, all share two things in common: They want their properties to be well-maintained and stress-free, and to increase in value over time.”
There is much you can do to manage the premises’ problems. You can delegate responsibility and improve tenant services to satisfy the demands. But you can make things easier on yourself by learning what you can about maintaining and repairing common commercial property problems.
- Property Value: The value of your commercial property depends on its appearance and desirability. It benefits from location, security, and safety, too.
- Compliance: Commercial properties are subject to changing local regulations and ordinances sometimes requiring permitting, repair, and restoration. But your tenants need space and a facility free of dangers to employees, risks defined in detail by OSHA.
- Rental Rates: The price you get for leasing the commercial property is a direct function of its looks, condition, and safety. If you’re to attract the best quality tenants, the most cooperative and well-known renters, you must offer a safe place with state-of-the-art features.
- Local Issues: The location of a commercial property may risk local or regional problems from flooding, wind, or other damage. The property must be in condition to minimize such damage. And, if it’s prone to crime, you must install the necessary protection.
- Legal Threats: A damaged property invites “slip and fall” accidents, workplace injuries, liability litigation, and increased insurance costs. Anything you can do in terms of risk management will reduce those threats.
- Public Reputation: In most environments and any business, you will develop a reputation as a landlord. If you don’t maintain the property, you’ll lose that repute and tenants with it.
What to do?
Your commercial property might be a retail store, auto repair business, strip mall, office building or complex, manufacturing or storage facility, apartment buildings, or something else. If you want to rent out your space for stores, banks, offices, restaurants, and even medical complexes, you must pay regular attention to ensure the direct and indirect value. Routine care should improve the durability, longevity, appeal, and investor value.
Here are nine tips to guide your maintenance and repair efforts:
- Arrange basic care. Things will happen. Windows will break now and then. Doors will jam because of temperature and humidity. Toilets will clog up and overflow. The heating and air conditioning systems will always malfunction at the wrong time. Depending on the size of the property, you probably can’t handle it on your own.
You need a janitor, handy person, or general property contractor to respond to problems. There may be a light fixture to replace, a plumbing leak to stop, or a kitchen appliance to repair. A commercial property of any size needs regular responsive repair and maintenance.
- Secure the place. Owners should start with the simple things. You need a procedure to assess, fix, and replace locks and keys when new tenants move in or current ones request. Tenants need guarantees their rental is secure from unwanted entry. But their concerns of their specific business may require more than locks and keys.
Depending on the property’s size and the business’s renting space, security needs may scale up. You should install strategic security equipment and placement to increase the protection of people, equipment, and records. And, contemporary threats posed by domestic violence and other criminals means securing entries with passkey or other systems.
- Make it look good. Commercial properties face the street, public, and potential clients. The curbside impression optimizes or minimizes psychological and market value. Overgrown trees, unkempt lawns, and unattended gardens minimize the preferred impression.
To optimize your property value, you should contract for regular landscaping planning and care. The contract may provide minimal attention, mowing and trimming lawns. Or, it might order maximum maintenance with frequent attention to irrigation, fertilization, pruning, trimming, and changing seasonal flowers. Above all, it should present a clean well-tended appearance.
- Monitor windows and doors. Most contemporary commercial properties have large windows. Some are wall to wall and floor to ceiling glass. Over time, those glass panels can shrink and contract breaking their seals and mountings.
Poorly sealed or cracked windows or misaligned doors leak heating and cooling from inside and outside. Doors and windows require quality caulking and weather stripping to seal cracks and crevices. But caulking deteriorates in time and needs attentive inspection and repair. Securing windows and doors will save you and your tenants thousands in energy bills.
- Upgrade the thermostats. You must keep alarm systems alive and working well. Invasion alarms, fire alarms, and fire extinguishers require routine scheduled inspection and replacement The electrical systems feeding the alarms and the devices themselves require care.
But thermostats are important, too. The technology and innovation empowering new thermostats can save you and the tenants’ money. You should consider the potential of replacing or upgrading the thermostats that control heat and air conditioning in the property as a whole and in the individual units.
- Inspect HVAC. The heating and air-conditioning system requires at least a quarterly inspection. This, too, is a function of the property size and configuration. But tenants have individual needs defining by their purpose and operations. Restaurants and bars have different requirements than hair salons or delicatessens, but your system must handle them all.
Poorly operating systems increase your energy costs, anger your lessees, and devalue the property. Some systems are taxed more than others by regional weather conditions. Maintenance requires changing filters, duct work, and controls. Prevention involves inspection and repair of central operating systems and mechanics.
- Check the foundation. Buildings are subject to damage from shifting soils. Properties in certain states and regions are susceptible to cracked foundations because of the sandy soil on which they are built. Others have damage resulting from poor construction.
Foundation issues present an expensive threat without easy fixes. But regular inspection should reduce the risk helping you address problems before they get bigger. Keeping the foundation strong or fixing repairs need the work of professionals you’ll find at HelitechOnline.com.
- Keep plumbing clear. Tenants, employees, and guests require fresh drinking water, operating toilets, and special water needs for their operation. Restaurants, for example, have unique waste problems. Regular inspections and maintenance should prevent plumbing problems.
But you’ll need more than that. As the landlord, you must have a plumbing response team in place and available 24/7 to handle emergency leaks, clogs, and backups. The response team must be available to tenants, so they can act without notice to you.
- Keep the roof overhead. The roof on any property is subject to leaks from physical damage or chronic weather wear and tear. Heat, cold, rain, wind, and hail will damage the roof over time or following a big storm. Those leaks will damage tenant operations, furniture, carpets, machines, and files.
Leaks also create mildew in insulation, walls, and anywhere the water can find its way. Before you see the damage, the water might damage electrical systems and technology creating larger expenses than the small leaks might indicate. Roof problems need care in advance, regular inspections, and immediate attention to signs of damage.
What’s the cost to you?
The better question is “What’s the cost it you don’t maintain the property?” Without adequate and preventative maintenance, you will lose tenants. The tenant turnover costs of advertising, time, background checks, and more may exceed the cost of repair and maintenance, especially if it becomes a serial thing.
Maintenance problems and your failure to respond can empty your property. Moreover, you don’t make money off empty units. So, you need a strategy to keep your property and investment in shape.
Any strategy must include the cost to you of maintenance and repair. It will vary from one kind of building to another and from one type of tenant operation to another. But you should determine a “norm.” That’s a cost you can build into your rental rates as a cushion against unexpected events.
Flora Richards-Gustafson, a contributor to Chron.com, notes, “When you own commercial property, you set aside funds in a designated bank account so you can cover the expenses related to repairs and improvements, known as replacement reserves. The reserved funds are not for general operating expenses. Instead, you use the funds for large expenses, such as a new roof or repaving a parking lot.”
It doesn’t pay to be a reactive commercial property owner. You must position yourself ahead of the problems and proactively disrupt damage. Your strategy should anticipate problems and intervene before they create trouble. A simple strategy schedules routine preventive inspections and regular maintenance duties. A risk management strategy will please your liability insurance company, and it will show your complaining tenants how you are on the ball.