Before deciding to consider the most common step of terminating your existing contract with your real estate agency and engaging the services of another, a good analysis and reality check is necessary. Why do properties sit vacant, generating no income for so long? Here are some real life contemplations for any landlord:
Asking rental price – Is the asking price realistic? The rental amount should reflect current market movements in the area. A simple comparison with available properties in a similar condition and location is a good start. Observation of economic trends and local conditions within the area or suburb has to be taken into account also. What are the advantages and disadvantages of having a property in that particular area? Why would a prospective tenant be attracted to your property and not to someone else’s? Also, what are your (landlord’s) short and long term plans for the property? All of these considerations, together with your own current financial position should play a part in determining the asking rental price.
Building appearance and desirability – Is your property presented neatly and is it well taken care of? Are the neighbouring tenants behaving professionally and respectfully particularly in relation to each other’s space and common areas? In our experience, good tenant prospects are not driven by the lowest possible rent. While rental cost is very important, the majority of business owners focus on presentation and they want to operate out of a trouble free and well maintained building.
Marketing campaign – It is a good idea to determine who is the most desirable and suitable tenant (i.e. pharmacist, manufacturer, distributor etc.) for a particular property before you undertake your marketing campaign. What will the agent do to target such prospects? Will the agent customise the advertising to match your specific requirements for your property or will they be doing the same routine campaign for every property without the application of further intellectual engagement and creativity?
Advertising – The response from previous advertising provides you with valuable data regarding what prospective tenants want to know about your property. What did and did not generate interest in previous attempts? What is the type and size of the signage used by the agency and why? We’ve seen many signs which, in our opinion are simply inadequate. Some have small, almost unreadable fonts (sometimes on very busy streets), others have insufficient or irrelevant information and some are undermined by poorly chosen colour schemes which almost camouflage any information within their surrounds. The same applies to newspaper advertisements. Will the ad stand out and have a chance to reach your potential client, giving you the most bang for your buck?
Importance of commercial property management for your assets– Is now the time to be considering engaging a property management agency to professionally manage your property? The consequences of a lack of consistency in property management practices can cause expensive and irreversible damage to the property. Consistency is what you will get from a property management professional. You can expect that your asset will increase in value, return a lower vacancy rate and have the security of statutory compliance and orderly leasing documentation providing peace of mind. Regular inspections conducted by the agent would intercept most issues and problems before they become urgent or costly. Many tenants are much more comfortable dealing with professional property managers than they are dealing with the landlord directly.
Once you have given these questions some thought and have a clear idea of what you are looking for, it is time to choose the agent who will best suit your needs.
Choosing an appropriate real estate agent - There is no doubt that we are experiencing a challenging and difficult economic period. Certain people are attempting to secure any and all business available, including venturing into commercial real estate without any prior proven experience. This can result in poor, uninformed decision making by the agent which can create costly and long term inconvenience to the landlord. In dealing with commercial property leasing, a competent solicitor or conveyancer may be able to resolve legal issues or inconsistencies which arise out of poorly prepared documentation, but they cannot alter previously negotiated terms and conditions.
A good agent with experience in commercial leasing will try to improve the total value of your assets in the long term. They are not driven by the number of transactions in the books but by maximising the value of the properties which they already manage. How extensive is the agent’s understanding of the current environment and those things which influence business in your area? Things such as rezoning or pending infrastructure changes, stability and predictability of outgoings, changes in building and documentation regulations all affect decisions and forward planning in relation to your commercial property asset.
Commercial Property Centre Pty Ltd aims to provide the best possible outcome for our clients while maintaining the highest standard of professionalism, transparency and integrity.