When Is It Time To Hire A Property Manager?

You’ve noticed something unsettling. The number of vacancies in your property investment is growing, and it’s becoming a challenge to bring quality tenants to occupy your space.

Over the years, you’ve watched thriving tenants retire or outgrow their accommodations. But something has changed. Tenants are flocking to other properties and leaving your investment behind. What’s happening? And what can you do to attract new tenants, keep the ones you have, and market your property effectively?

It might be time to hire a property manager.

What can a property manager do for you?

Simply put, a property manager will do everything they can to help you fully maximize your investment. Your property should be making you money—that’s the bottom line. And having an advocate take care of the day-to-day management of your property could be the difference in reaching your full income potential, or having opportunities fall through the cracks.

So, what can property managers do to help you achieve your ideal investment outcome? Here are just a few of the many ways you can benefit:

  • Stabilizing and reducing operating expenses
  • Implementing tenant retention programs
  • Proactively applying Risk Management programs to protect assets
  • Serving as your support when negotiating service rates
  • Regular inspections of the property
  • Ensuring quality lease terms and conditions
  • Monitoring construction supervision
  • And much more

What are the signs you could benefit from property management?

Many property owners effectively manage their own properties. But when is it time to look into hiring a commercial property management team? Do a quick assessment.

Lack of time – It’s a simple question. Do you have time to execute all of the necessary property management duties without sacrificing quality service or your personal life? If you are managing several properties at once, a property manager can help you by taking care of the daily tasks that can consume your time.

A property manager can handle screening tenants, listening to tenant complaints, ensure tenant safety, and deal with any after-hours emergencies that need immediate attention. This frees up your time to focus on the things that matter to you.

Outdated understanding of the industry – Staying current with industry trends is a must. There is a constant need to be updated on the latest changes that occur in the insurance industry and legal system to safeguard your investment.

Property management teams can make sure that Risk Management programs remain current and effective. They can also enforce tenant obligations, collect delinquent rent and be there for you during difficult legal processes. It’s a welcomed weight off your shoulders.

Several vacancies within properties – Property management teams can help fill troublesome vacancies by utilizing their network of agents and marketing professionals to increase occupancy and improve tenant retention.

Furthermore, they can complete regular site visits, property assessments, and help negotiate the best terms and conditions for all of your leases. This builds a solid foundation of communication and trust with each tenant you manage.

You want more insight throughout the construction process – Supervising the flow of an entire construction process takes knowledge, dedication, and attention to detail. These are all things a property manager can offer. Handing over the reins to a skilled team can free up your time and minimize your stress because they can handle any challenges that arise and monitor from the pre-design stage all the way through construction.

You need assistance when handling income/operating expenses – It’s about more than managing a property, it’s about managing your assets. Part of the property management service is keeping a detailed record for the operation of the property.

Managers can help with your annual operating budget and stabilize operating costs, financial reporting, and account management. They can make sure that you aren’t paying more than you need to be, and help you navigate through the complex and confusing red tape.

The decision to hire a property manager is a personal one, but one worth looking into. When it comes to property management, what matters most to you? Let us know in the comments.

Interested in learning more about how Crunkleton can help manage your property? Click here to download the guide.

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HALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM

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The Trend Report: Emerging 2016 Insights

The Urban Land Institue recently released their annual report on the emerging trends in Real Estate for the year! Here are just a few highlights from their findings on the trends we can expect to see emerge nationally over the course of 2016!

Second Tier Cities Take Center Stage

Second tier cites such as Austin are booming, and according to the report, these cities are only getting started. In addition to their reputations for hipness, cities such as Nashville, San Antonio, Portland, Austin and Raleigh-Durham are also attracting attention for their lower costs of living, and their increasing ease of staying connected far from main hubs, more upside from affordable and available investment opportunities, and increasing sophistication from realtors and investors.

Will Millennial Parents Move to the ‘Burbs?

A generation traditionally known for their obsession with urban living, a growing number of Millenials are becoming parents and looking to find homes and good schools for their children. While this generation has put off having kids longer than previous generations, recent studies suggest that a larger number will soon become parents, and could quickly fuel a suburban boom. However, these won’t be the suburbs of yesteryear. Studies show that young millennial parents will be drawn to more mixed-use, walkable developments, offering a mix of urban and suburban benefits with quick easy access to the city’s core.

Investment in the Changing Office Landscape

The continued recovery of the US economy has led not only to job growth, but also a strengthening of the commercial sector. Open office plans still dominate the market and the average SF per worker, which was 253 in 2000, is predicted to shrink to 138 by the year 2020. Showing no signs of slowing down, investors can expect to see continued development and redevelopment of existing spaces, as well as a continued rise in coworking.

Pulling Up Parking Lots?

As many young Americans opt out of car ownership, and tech trends such as ride-sharing and autonomous cars begin to change transportation patterns, many urban planners, government officials, and real estate owners are questioning if parking lots are the best use of downtown real estate. Trends suggest that “existing parking represents a suboptimal use of land,” and as cities change zoning regulations to reflect these shifts, developers are asking how they can take advantage. Are surface lots and parking structures potential development opportunities?

Increasing Investment in Infrastructure

America’s crumbling infrastructure has been in the news for years, yet the need for new mass transit, better roads and highways, and improved aviation and rail facilities hasn’t been met: the American Society for Civil Engineers estimates that $3.6 trillion would be needed by 2020 to meet the backlog of much-needed repairs. This suggests there’s a great upside in new models for infrastructure funding, including public-private partnerships and real estate investment trusts (REITs).

Urban Agriculture Is On The Rise

While conceding that we’re not likely to see silos dot the skyline anytime soon, the ULI report suggests that an increasing number of viable urban farms and rooftop gardens, including Brooklyn Grange in New York, large urban farm operations in Detroit, and a forthcoming vertical farm in Newark, New Jersey.

CLICK HERE to read the full report and discover the rest of the exciting emerging trends for this year!

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KADIE PANGBURN
MARKETING COORDINATOR
CRUNKLETON & ASSOCIATES
KADIE@CRUNKLETONASSOCIATES.COM

The Top 6 Reasons to Hire a Commercial Property Management Team

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We meet property owners all the time who ask us just why they should invest in hiring a property management team. So, here is C&A’s “Top 6 List.” Our top 6 reasons to invest in a great property management team:

1) Experience
Right off the bat, it’s likely that, unless you’ve been around the block a time or two, a trained commercial property management team is going to have more experience with what it takes to successfully manage your investment property simply because it’s what they do, full-time, 24/7. Not only do they have the first hand experience of successfully managing other commercial investment properties, they also have hours and hours of rigorous training, testing and certifications on how to do that job to the very best of their ability.

2) Market Knowledge
As a property management team, it’s our job to stay in tune with the market and know what’s going on in the area. This way we can help suggest how to best position your property for success.

3) Communication
Unless running your investment property is your full-time job, chances are that you are a busy person with other things to do than answer tenant phone calls at all hours of the day, phone in work orders, negotiate with vendors, compile annual property reports for shareholder meetings, and connect with your tenants in a meaningful way that will build trust, help maximize tenant satisfaction and boost overall tenant retention.

4) Troubleshooting
Again, this is what our property management team does for a living. We are skilled at dealing with any situation that arises quickly, effectively and cost efficiently, while at the same time making sure to conduct ourselves in a professional manner that gives both the tenant and property owners the respect they deserve.

5) Maximized Returns
The number one goal of our property management team is to help you maximize your return on your investment. This means we will do more than just building maintenance; we are trained to streamline your operations and take them and your ROI to the next level.

6) Protect Your Investment
Just like a new mother wouldn’t hand over her newborn baby to just anyone, our property management team is here to help you protect your investment and care for it as if it was our own. Our team is built around a core structure of individuals who have had personal experience as investment property owners themselves and gone through rigorous professional training to make sure they can protect every investment property we handle as if it was their own.

So, if you own a commercial investment property and you’re curious to learn more about what a property management team could do for your ROI, make sure to contact us at info@crunkletonassociates.com!

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KADIE PANGBURN
MARKETING COORDINATOR
CRUNKLETON & ASSOCIATES
KADIE@CRUNKLETONASSOCIATES.COM

 

5 Ways To Minimize Your Investment Risk

MinimizeInvestmentRisk

While commercial real estate in the U.S. continues to be a safe haven for investors seeking higher yields with relatively low risk, new investors often worry they will find themselves in over their heads, saddled with the next Mr. Blandings Dream House or Money Pit.

However, investors can minimize their investment risk exponentially by doing some basic homework on their potential investment properties. We recommend always looking into these 5 factors as part of due diligence when determining the potential risk factor for any investment.

1) History Of The Property

When looking to invest in a property, one of the first things investors should look into is the history of the property to find out what type of uses the building, or land the building is situated on, has been used for in the past.

Finding out if the building has possible asbestos issues, or if the land has ever hosted a gas station, dry cleaner or other business where the possibility of toxic environmental issues could be a concern, or has had a history of past structural or mechanical issues, can minimize your risk of getting saddled with costly future expenses.

A phase I environmental report is always recommended when making a real estate purchase.

2) Tenant Credit

Whether you’re purchasing an investment property with existing tenants, or planning on leasing out your property once it’s purchased, making sure you have good tenants with a positive credit history can save you from costly future property management concerns.

And while purchasing a property with a creditable tenant as an existing lessee, who has the financial stability to maintain their lease for the long term, may cost you more on the front end, it can save you from spending money in the future on legal fees or expensive renovations in the event that a less creditable tenant vacates the property before their lease term and leaves you having to attract new, more creditable, clients to fill the space.

3) Financial Terms

Another area to educate yourself on before investing in a property are the loan terms and what they will mean for you right now and what they will mean for you in the future so you can make sure to strike the most favorable terms for your situation.

Ask questions like, “Will the loan be a Non-Recourse, Partial Recourse, or Full Recourse loan? Will it be a floating or fixed rate loan? Will there be a swap or not? Are there defeasance fees if I decide to sell before the loan matures?”

These questions will help keep you informed as to all of the potential financial risk factors as well as assist in your overall plan for the investment.

4) Market Trends

Market trends are another important area of research when choosing in which potential property to invest.

One of the main things to look for are the vacancy rates for the area over the last 3-5 years. Obviously, you’re not going to want to pay as much for a building that has an average vacancy rate of 40%, compared to one that has an average vacancy rate of 4%, especially if the surrounding area has ample vacancy increasing competition for tenants.

The other is to try and determine if the property is in an upward trending area, or in an area situated in a downward trend. Locating potential sites in new up and coming areas that are just starting to take root, is often a great strategy for investing while the prices are still low, and then seeing substantial investment value growth as the area fully develops. Factors that can influence these trends include: zoning changes, improved infrastructure, new developments, and lack of supply in adjacent areas.

5) Have A Plan For The Property

Finally, before you sign on the dotted line, one of the biggest factors in minimizing your investment risk is to have a detailed plan for the property. Simply buying land on gut instinct, just to own property without any plan on what you will do with it, can often be a costly mistake.

We recommend sitting down and writing a detailed plan for what you intend to do with the property/building/land you plan to purchase. This should include any developments/improvements you plan to make and what you approximate the return on those developments/improvements will be. It should state what your rental plan is for the property, how long you plan to hold onto the property, and what the intended use will be for the property. Will this be an income producing property, a value added asset property, or do you simply want to hold onto the land long term for a future date?

Finally, your plan should include a detailed exit strategy, how/when do you plan to off load the property after you purchase it? What will your estimated costs for selling the property be and what sort of tax liabilities will you be accountable for if you choose to sell?

Investing in commercial real estate can be daunting at first. However, with a solid plan in place, a little research and by properly educating yourself on the potential properties you can substantially minimize your investment risk.

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KADIE PANGBURN
MARKETING COORDINATOR
CRUNKLETON & ASSOCIATES
KADIE@CRUNKLETONASSOCIATES.COM