What are the functions of Commercial Property Management?
Commercial Property Management is a service offered by natural and legal persons for the administration of the real estate.
It consists mainly of intermediation and advice on the purchase/sale, lease or transfer of a property. That is, this business is based on delegating Commercial Property Management to a third party. This can be a residential or commercial or industrial premise.
The objective of hiring this management service is to guarantee greater profitability. This given that the property owner is geographically far away or does not have the necessary knowledge and/or time.
Functions in property management:
The functions to be fulfilled by the person in charge of management, called manager or broker, are mainly the following:
- Take care and preserve the interests of the property owner.
- Search and evaluate potential tenants who occupy the property. This, developing an appropriate marketing strategy.
- Manage the collection of rents and then transfer the gain to the owner.
- Keep an inventory of all objects that are inside the property before occupants enter.
- Ensure that the property is in habitability conditions.
- Monitor incidents that may have damaged the property while the lease is in progress.
Advantages and disadvantages of Commercial Property Management:
Among the most notable advantages of property management are:
- Higher-income: A manager, having the knowledge and experience, should be able to lease the property by charging a higher rent than the owner would get.
- The network of contacts: The broker has partners specialized in promoting and renting properties.
- Knowledge of the law: Managers not only know how to sell or rent real estate but must be instructed on all legal procedures involved in this lucrative activity.
In contrast, there are also disadvantages of hiring a broker:
- Management cost: The advisor charges a commission for the service, which implies a cost to the owner. For that reason, it is necessary to look for a real estate agent that ensures profitability.
- Loss of absolute control: The owner will no longer have full control over the property. He no longer decides who to rent, although he can agree with the manager certain lease conditions.
Overall, we would say that hiring Commercial Property Management is in most cases, the best choice for your investment property.
The benefits of their services provided here are far outweigh its disadvantages. However, it is a matter of personal preference.