“Improving ProfitabilityIn Your Commercial Real Estate For Rent”
Do you want to earn more profit from your rental property business?
Managing a business in commercial real estate for rent can be pretty high-profit. But if you aren’t strategic in doing it, you’ll be stuck with just a “good enough” profit.
If you want to earn more from your commercial property for rent, you must find ways to stand out.
Usually, tenants choose to rent space from commercial properties with features or amenities that can benefit their business.
Offering different amenities will set your property apart from your competitors.
However, you need to make sure that the features or amenities that you’re going to add will benefit your commercial real estate for rent.
To help you add the right features and amenities, here are some tips for increasing the profitability of your commercial real estate for rent.
Increasing Rental Income in Your Commercial Real Estate for Rent
As I said earlier, one of your goals with your commercial real estate for rent is to make it as profitable as possible.
Adding several amenities and giving incentives and perks to your tenants would help you achieve this.
You can also increase rent from time to time. But there are other ways to earn more in your commercial real estate for rent.
I’ll talk about that in this article. But before that, let’s first know what commercial real estate for rent is.
What Is Commercial Real Estate?
Commercial real estate is also known as a commercial property, investment, or income property.
It refers to buildings or land that’s intentionally made to generate a profit. The income generated can be either from capital gain or rental income.
Commercial properties are designed specifically for commercial businesses. These properties are to be used or rented only for business operations.
The property owners usually gain profit from rent. On the other hand, the commercial tenants earn profit from their business or clients.
13 Tips to Make Your Commercial Rental Income Higher
Raising your rent is one of the best ways to increase the profitability of your commercial property.
However, there are things you need to do before you can raise the rent.
To give you an idea about it, here are 13 tips to help you increase the profit of your commercial real estate for rent.
1. Choose an In-Demand and Convenient Location
When buying a property you want to turn into commercial real estate for rent, always choose those that are located in more desirable areas.
Commercial business owners will pay more if the property is in a “hot” location for their business.
Usually, tenants choose commercial real estate for rent that’s near their clients. With that said, it’s best to buy a commercial property in an area that’s currently being developed.
During this time, you can get a better deal on the purchase price compared to when it’s fully developed.
Properties situated near a crossrail train line or other transport developments are also preferable.
That’s because they’re convenient to commute to — something important for commercial real estate for rent.
2. Set the Profile of Your Target Tenants
It is vital for property managers of commercial real estate for rent to set their target tenant profile first.
Having a specific target market can help you plan your location and even marketing beforehand.
Targeting bigger, more prestigious companies means you should be looking at commercial real estate for rent in business districts.
However, if you’re targeting less prestigious businesses, you can look at commercial real estate for rent in other areas.
3. Provide Your Tenants’ Needs or Wants
Providing your tenant’s needs and wants is a sure way to attract the right tenants at your named price.
Try adding mod-cons (modern convenience) to your commercial property. This is since most tenants often choose places where they can enjoy many amenities.
The conveniences expected of commercial real estate for rent tend to be different from those expected of residential places for rent, though.
For example, a mod-con many residential places for rent now have is the laundry room.
But that’s not exactly something most tenants of commercial real estate for rent need. They don’t do their laundry where they work — or not usually.
So think about what companies would consider convenient. For instance, you may want to look into CCTV security for your commercial real estate for rent.
4. Regularly Evaluate If You Should Increase Rent
Always check the average rate of commercial real estate for rent in your area. Determine whether or not you should think about increasing the rent in your property.
Never hesitate to increase your rent if it’s necessary. Your rent should reflect your area’s improvements.
Just always make sure not set it too high or you’ll end up losing tenants.
5. Consider Lowering Rent to Avoid an Empty Property
There are times where you’ll suffer from vacant commercial real estate for rent. If this is the case, you must lower your rent to help you gain potential tenants.
Don’t be afraid of setting your rent lower than the average. Remember that having renters is more important than minimal rental fluctuations.
After all, you can consider increasing the rent if the rental becomes more stable. And if you find out that your property is already providing the tenants more than what they pay.
An example is for the mod-cons available in the unit or the recent upgrades that you added to it.
6. Evaluate the Tenants’ Need for More Comfort Rooms
Adding more comfort rooms will cost you some money. But doing this will help you gain a faster Return On Investment (ROI).
It also adds value to the commercial real estate for rent.
Most commercial tenants will be attracted to a property with multiple comfort rooms. That’s since tenants won’t have to pile up outside to use the loo.
Having multiple bathrooms will also save everyone else’s time in waiting to use it. That’s good for business operations.
The convenience of having multiple bathrooms will add to the satisfaction of your tenants in the amenities present in your commercial real estate for rent.
It will also avoid disputes among lined-up tenants who could argue who comes first in getting to use the comfort room.
This might occur, especially when arguing tenants have urgent and important appointments to attend to.
7. Pay Attention to Storage Opportunities
Don’t neglect your storage space. The empty spaces can be used as necessary extra storage rooms, especially to commercial tenants.
Most commercial tenants will be willing to pay extra for storage space. That’s because most businesses already do count storage space as an ongoing expense.
Commercial real estate for rent needs storage rooms. This may be used to occupy needed documents or paperwork for running a business.
Storage rooms are essential too for businesses that need stockrooms. The stockrooms are usually filled with inventory or equipment that the company owns and must keep.
8. Build Harmonious Relationships with Tenants
As much as possible, property managers should build good relationships with their tenants.
Doing this will help you ensure that your tenants will stay in your commercial real estate for rent for a longer time.
Building a harmonious relationship with your tenants is not that hard to do. Just let them know you and your character.
A good relationship with your tenants could also benefit you in advertising your property in the long run. When tenants are satisfied with your property management, they’ll tell others.
That can help you get more clients for your commercial real estate for rent. After all, word-of-mouth is still one of the most trusted methods of advertising for many potential clients.
9. Consider Online Marketing
Digital advertising is the largest growing marketing channel. With that, any commercial real estate for rent business should also consider doing online marketing.
Having an online presence will help your property gain a significant boost in terms of exposure. Currently, most people look for content and validate found information on the Internet.
In fact, the current generation relies heavily on the Internet when making decisions.
Consider making an account on each social networking website. This could help you advertise vacancies, sales, or promos in your commercial property.
10. Have Tenant Incentives
To attract more tenants, tell people that you give incentives and perks to your tenants. Doing this can make your commercial real estate for rent stand out.
People love the idea of receiving something for free. For instance, you may offer tenants a month or two rent-free if they sign on for another year at the end of their lease.
Incentives like these tend to go over very well in commercial real estate for rent. So consider them when trying to get commercial tenants to stay.
11. Monitor Everything in Your Property
An effective property manager must monitor everything in the property.
You should have a bird’s eye view of your units at all times. Doing this will help you track your rental units and lease agreements.
There are several tools that can help you do this and you can find most of them online. These tools can simplify your life as well as help you reduce your vacancy rates.
It will also increase your property’s security.
Final Thoughts on Increasing Rental Income in Your Commercial Real Estate for Rent
In this article, we said that commercial real estate for rent is specifically made to earn profits either from capital gain or rental income.
The property owners gain profit from rent while commercial tenants earn profit from the business or clients.
Managing a commercial property requires you to make sure you’re earning more through increasing rent.
However, a property manager can’t just increase their rent. The rent increase should be reasonable to avoid losing tenants.
Just remember these 13 tips to help you provide a reasonable increase in rent.
- Choose an in-demand and convenient location.
- Set the profile of your target tenants.
- Provide your tenants’ needs or wants.
- Regularly evaluate whether you should increase rent.
- Consider lowering rent to avoid an empty property.
- Evaluate the tenants’ need for a second bathroom.
- Pay attention to storage opportunities.
- Build harmonious relationships with tenants.
- Consider online marketing.
- Reward tenant incentives.
- Monitor everything in your property.
If you want to add more information about increasing the rental income in your commercial real estate for rent, leave it in the comments.
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