Hire the Best Property Management Company for Your Commercial Real Estate Investment

When you own commercial real estate—whether retail, office or industrial—someone else’s business depends on you and your property. That’s a big responsibility. Furthermore, by servicing your tenants and maintaining the building they occupy, you’re more likely to retain them long-term and even see your property value increase. Of course, these tasks take time, know-how and on-site attention. That’s why hiring a property management company could make sense.

What Does a Property Management Company Do?

Yes, commercial property managers deal with prospects and tenants, collect rent, handle maintenance and repairs, and carry out evictions when necessary. A good property management firm, however, will understand your investment goals and look for ways to increase your property’s value.
For example, a knowledgeable property manager will maximize your potential rent income and minimize expenses, thereby increasing your net profit. They will also be on the lookout for ways to affordably boost the visual appeal of your property and its general value. And as they spend time on-site looking for ways to improve the property, they’ll also be able to spot potential problems before they get out of hand.

How Can a Property Manager Keep Costs Down?

As they work to maximize your rent income—while staying competitive in the market—your property manager should also have a plan to keep Common Area Maintenance (CAM) and Taxes and Insurance (TI) to a minimum. Make no mistake, just a few pennies per square foot can add up to thousands of dollars annually.

To minimize CAM, property managers evaluate different vendors such as landscape companies and repair services. A property management company with a satisfied list of clients will likely have a network of providers offering the kinds of services you need for a reasonable price.

Regarding taxes and insurance, qualified property managers must understand local property taxes and appraisal values. If necessary, they should be able to refer you to a local property tax attorney that can help you appeal your property value and possibly lower your taxes.

By keeping down the costs of CAM and TI, a property manager can effectively make it possible for you to afford property improvements that help keep your rent competitive and tenants happy.

How Is a Commercial Property Management Company Paid?

As you search for a property manager, you’ll find that some charge a monthly fee while others charge a percentage of your property’s income. Most commercial property management companies receive a percentage of the rent collected, usually between five to 10 percent.

Proceed with caution when a company asks for less than five percent. This could mean that you’ll get nickeled and dimed for every service provided and end up paying more than if the percentage charged had been higher.

In any case, be sure to ask about services included and additional financial obligations you may have as a landlord including licensing, inspection and insurance.

Does the Company Provide Services Other Than Property Management?

Some companies specialize in property management while others are part of a larger real estate company. Both can do a good job. However, if the property managers you choose are associated with a commercial real estate firm, then they can help you buy additional properties or sell a building.

Furthermore, a real estate company with property management has likely invested in your market. This can be good assurance that they know what is necessary for you to be successful.


The information contained in this article is general in nature and should not be construed as financial, tax or legal advice.  As with any financial or legal matter, consult your tax advisor and legal counsel.