Real estate properties have long been considered prime investments by many investors worldwide. As a result, anyone looking to diversify their portfolio and secure long-term assets has always defaulted to getting a foothold in the real estate market.
Furthermore, there’s also a great variety of properties, land, and buildings to invest in. Not to mention that the prices scale very well, and value appreciates over time.
However, more serious investors know that more potential returns lie beyond the residential housing market, and they exist in commercial real estate properties. And for today’s topic, we’ll be learning how you can get the most out of your commercial buildings and investments.
#1 Know Your Property
Firstly, you need to know what type of commercial property you have on your hands before you make any changes or start significant projects on your building. Clarifying the type of property according to its purpose will help narrow down the makeovers you need to choose from and give you peace of mind.
- Multi-Family: As the name suggests, multi-family properties are your next level-up from your average family homes. These buildings feature multiple residencies, starting from your average Triplex rentals and to high-rise apartment units. These properties can house numerous tenants simultaneously and generate massive streams of rental income depending on location and overhead expenses.
- Office Space: If you’ve ever worked in the corporate world, you’re most likely familiar with the grand buildings with multiple offices housing different kinds of professionals. These commercial properties are known as office space and are also one of the most lucrative investments if you can find a long-term business to lease.
- Industrial: While not as prominent as the properties above, industrial buildings are most sought-after and crucial to every kind of business. These buildings can range from heavy-duty manufacturing plants, large-scale warehouses, and even simple assembly factories depending on the use. Size plays a significant role as these properties commonly house large trucks and thousands of products at a time.
- Retail: Last but not least, we can’t forget the line of commercial properties that get the most foot traffic – retail buildings. These properties can vary from shopping centers to huge malls and are among the most flexible facilities to lease because stores and brands will want to jump on the opportunity.
#2 Functional Renovations
Now that you understand what type of commercial property you have or at least know what you plan to do, second on your list is making functional renovations to your building to make it more appealing and increase its value. Since we already know that aesthetic upgrades are a given in any real estate investment, let’s take a look at other aspects you might overlook:
Review the inner workings. A beautiful building is sure to attract clients, but a structurally-sound building is what keeps them and encourages them to stay long. A priority on your renovation list should be reviewing the inner workings of your building from electrical wiring, plumbing, and overall fidelity. See what changes you can make to improve upon these aspects and identify potential weak spots.
Time for general cleaning. After working out the fundamental aspects that make your commercial property functional, your next objective should be general cleaning. Work on both the building’s interior and exterior, like cleaning dirty vents, scrubbing down the floors, and dusting out the place. Before you make a break for aesthetics, consider cleaning up the area and identifying what you can keep.
Guarantee safety and security. Lastly, a great way to market your commercial office space to potential clients is by guaranteeing their safety. The last thing businesses want is to work in an unsafe environment, making the necessary allocations for alarm systems, surveillance, outdoor light fixtures, and the like.
#3 Consider Different Leasing and Renting Strategies
And for the cherry on top, you’ll want to get creative and consider different leasing and renting strategies that will guarantee you a good inflow of cash and stream of income. Instead of sticking to traditional methods, find other uses for your space, update your leasing terms, and identify what aspects of your commercial property are currently undervalued.
- Maximize the space: More and more companies are starting to use less and less space, which means you won’t be getting clients to rent out an entire floor. So instead of limiting your options, innovate with your building and see if you can divide some floor space to accommodate more clients. The same concept applies to multi-family properties as well. See if you can divide and get even more room for tenants.
- Consistent and Competitive: Leasing terms can be a hassle to deal with, but above all else, you’ll want to keep them consistent and competitive. In doing so, things will be easier to manage, and your clients will also appreciate it.
It’s Tough but Worthwhile
Overall, while commercial real estate investments might seem challenging to manage, there are plenty of ways to benefit from them. And with the right amount of effort in critical places, you are sure to get the most value out of these properties. Implement the practices mentioned in this guide according to your investment strategy and see the magic for yourself!