“Tips In Improving Commercial Buildings for Lease”
Looking for ways to improve the value of your commercial property?
The commercial real estate is a lucrative investment. However, with more businesses sprouting as a response to market demand, competition is increasing.
One way to stand out is by increasing the value of your commercial buildings for lease.
Adding value allows you to get the most out of your business. Doing so results in an increase in cash flow, decrease in expenses and increase in the overall equity.
The best thing about it? It doesn’t have to take up too much time or money. In this article, we will discuss the different ways to enhance the value of commercial buildings for lease.
Adding Value to Commercial Buildings for Lease
Upgrading your commercial properties is the best way to set yourself apart from the competition. If you want to increase your number of tenants and retain old ones, you need to make your commercial buildings for lease attractive enough for them.
Like residential properties, commercial buildings need to be improved. These improvements will then result in added value for the properties.
So how can you do this?
Making Physical Changes
Making physical changes is one of the common ways to improve the property. Improving the aesthetics of your buildings tend to attract high-quality commercial tenants.
Aside from changing the appearance, consider adding more space that can be used for generating additional income. Converting storage space, common areas and other not rentable space to office space is the best way to achieve adding more space for rent. However, you need to ensure that you receive permission from local authorities before proceeding with any construction work.
Low-Cost Ways of Increasing a Property’s Value
Renovations can be costly, and not all commercial real estate businesses are willing to shell out the money. Fortunately, not all physical changes have to be expensive.
There are also low-cost ways to improve your commercial buildings for lease, such as:
- Hire a crew to maintain the outside of your property.
- Assign a garbage pickup company to clean and dispose of your property’s waste.
- Repaint the exterior of the property.
- Update your property’s signage to give it a refreshing look.
- Have exterior of building steam cleaned by a service who specializes in this.
Increasing the Value of Commercial Buildings for Lease
To find out how competitive you are in the market where your building is located you should conduct market research on the buildings and properties in your area that you consider as your competitors. If rents are higher at other properties with no vacancies, notice what makes them desirable to tenants. Knowing what is working in the area help you in deciding if you want to mimic the value approach of those competitors.
On your own property, make the necessary changes to make it better (or on the same level) as those properties. This can attract high-quality tenants and help you maximize the capability of your commercial property to earn a higher income.
H4: Adding Necessary Amenities
Many tenants prefer commercial buildings that offer useable amenities such as:
- Various lunch options, and
- Security features.
- High-speed WiFi
- Bike friendly storages
However, beware of spending too much on amenities. Make sure that amenities that are considered as necessities by the tenants and that they are built to ensure the effectiveness of the addition.
For more convenience, consider allocating space for a onsite restaurant or a convenience shop. This can help keep the costs of providing a lounge and food options at a minimum expense for your business. It can also be a way to increase revenue.
Give Better Lease Agreements to Tenants
Understanding your costs and how to negotiate a favorable commercial lease is key to passing better lease agreements on to your tenants. Giving better lease agreements than competitors in your area can also help you attract and retain tenants.
For tenants that have proven themselves as responsible, and someone you would like to retain for the long term, provide longer leases with more flexibility in the lease agreement. Doing this will ensure ongoing profitability for your commercial property rental business.
Decrease the Property’s Expenses
Review the expenses of your maintenance, repairs, and amenities, and any other costs associated with your commercial buildings for lease, and develop a plan to decrease expenses gradually. To keep maintenance and repairs at a minimum, consider upgrading the property and fixing repairs instantly.
Being able to monitor the maintenance of the building will help you know the actual costs and keep the building running and help you understand how to save money in maintenance costs. In monitoring your building maintenance you can normally avoid large repairs and other expenses by taking care of issues immediately. Changing the light bulbs and heating/cooling systems to eco friendly and cost efficient units can also help save money from utilities.
To sustain keeping your expenses at a minimum, use energy efficient systems and require tenants to pay the portion of the utilities upgrades. Having a flexible commercial lease regarding upgrades and sharing costs can allow you to offer the best option for your tenants at your commercial building for rent.
Increasing rents just because isn’t the right way of managing a commercial lease and tenants. Instead you, should compare rents with other commercial lease competitors, offer more value for the property in amenities, upgrades of building services and attractiveness. By doing these simple task you can attract higher-paying tenants. In addition, adding more value to the building and other improvements help you justify to current tenants your need to raise rent payments.
However, make sure that the rent is still competitive. Offer good value for new and present tenants when considering raising rents. Make sure to negotiate it with your tenants so they can prepare for increases. Iyt is a good practice to identify rental increases at least 6 months in advance so the commercial tenant can be prepared and be able to afford for the rent increase.
Increasing rent is advisable if the property has high-end tenants and situated in a popular location. On the other hand, if your tenants are only small businesses, then an increased rent rate is not advisable as tenants my leave to competitors offer lower rents.
Final Thoughts on Tips for Improving Commercial Buildings for Lease
In this blog post, we talked about the different ways to improve commercial buildings for lease. You can increase the value and income of your property when you make changes to its appearance and add more rent spaces.
If you can’t afford to make major structural changes, doing little things can help improve your property. Maintain your property’s grounds and repaint it regularly.
Don’t forget to upgrade your signage to give your property a refreshing look.
Adding amenities, decreasing expenses, giving better lease agreements, and increasing rents will also increase your property’s value and profitability. Just make sure to do it all strategically to make your decisions more effective.
If you have more questions about commercial buildings for lease, just leave them in the comments below.
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