Commercial and Retail Property Managers

Posted by in Property Management on November 4, 2011

By John Highman

When it comes to leasing and managing a commercial or retail property, every lease contained in the property or tenancy mix is likely to be different in covenants and clauses. For this reason the property manager or leasing manager must read the lease before they act on or enforce occupancy situations.

Most commercial or retail leases have covenants that are separate requirements on the lessor and the lessee. On that basis they should be found and read so that any issues can be enforced or addressed as the case may be. Outstanding covenants or matters of lease compliance should be addressed in a timely way and particularly before any sale situation for the property.

Critical Dates

Some of these covenants will be time or task specific; in other words they have to be done in a particular way and by a particular time. That being the case the individual items or covenants should be checked for compliance and conformity. Fix matters before they get out of control or beyond the critical dates.

To help you here are some typical covenants to check out:

  1. Provision for refurbishment of the property or the tenancy by the tenant or the landlord. It is common in longer leases that a clause like this will oblige a party of the lease to upgrade or renovate the premises in a particular way.
  2. Rent review dates and implementation should always be checked. It is quite common for landlords or property managers to overlook rent review dates. In some cases, time may be of the essence and may not allow you to implement an old overlooked rent review.
  3. Many leases have insurance provisions passing the risk of certain factors of the property to the tenant. Make sure that the notices of insurance and certificates of currency are up to date and suitably supplied.
  4. The option dates for renewals of lease may be time critical. In some situations they are also legislation critical. This being the case it is very important to ensure that the dates have been satisfied by the actions of the parties.
  5. The implementation of outgoings charges and notices will be detailed in the lease. Make sure that these notices have been correctly supplied in accordance with the lease and also the local legislation relating to the property type. Critical dates may be an issue here.
  6. Most leases will have a provision for make good. This is a clause that nominates what should be done at the end of the lease and who should pay for it. It is wise to check this clause to see what impact it will have on the tenant and the landlord by way of costs and timing.
  7. Actions for any default under the terms of the lease should be satisfied in accordance with the lease and local property legislation. If a default of lease has been determined or exists, it is quite important to understand that the default provisions have been correctly exercised and are being enforced.
  8. Demolition clauses or relocation clauses may appear in a lease where new development or renovation is a factor of occupancy. The lease will detail how these clauses operate but there can also be factors of local property legislation that will have an impact and even overrule the lease. Retail property and retail tenancies are a case in point in many locations. If you do not know about the legislation then it is time to see a solicitor who can give you the appropriate local advice.

These are some of the main lessee and lessor obligations under the terms lease. There will be others, and on that basis every lease should be reviewed comprehensively by the property manager, leasing manager, or property owner. The critical dates and situations in a lease should never be overlooked or avoided as they can have a major investment impact on the property in the future.

No Comments

How Property Management Companies Work

Posted by in Property Management on November 4, 2011

By Mark Middleton

Property management companies have big shoes to fill. They have to fulfill every wish of their boss; the owner of the properties.

While local property managers can keep a physical eye on your rental property so it is being taken care of by the tenants, a good local property management team can find problems sooner and correct them more efficiently. Local property managers often have contacts with contractors that they regularly work with and trust for repair jobs that can save the owner money and time.

Management companies will fill your apartments for you. They will find good tenants and then keep them around. Often times, good tenants will only go through a HOA company. This is because everything from viewing the property to negotiating and signing the lease as well as dealing with maintenance and repairs will be more efficient to someone that is in the area that will be coordinated, professional and provide the service.

Management avoids bad tenants because usually bad tenants will target places that are managed by the owner of the rental place because they can’t get away with anything with property managers. When a property is for rent by an owner, bad tenants know that the rent will be less and it will be less intense of a buying in process. Bad tenants know that they can’t be evicted without notice. An eviction can take months and cost you a lot of money. Property managers will track references and do the most that they can to avoid potential bad tenants and eviction problems associated with those types of situations.

A professional can show the property to new tenants and potential tenants. It might be inconvenient for the owner of a building to take the time and show the building off to potential renters, so it is a property manager’s job to respond quickly to these people for viewings. They report the status of the property, occupancy rates, dates of lease expiration and all other matters. They will do everything that they need to collect the money for the owner.

When a property manager takes on a new place they are obviously going to need to get accustom to a new setting. New ways of doing things, new tenants and a new owner with an entirely new system is something that could be tough for a management company to get accustomed to. A good company will give you no complications

No Comments

5 Keys to Getting Great Tenants Into Your Apartment Buildings

Posted by in Apartment Buildings on November 4, 2011

By Darin Garman

One of the most important parts of managing an apartment building is tenant screening. Choosing tenants wisely will do more to make your job easier as an property manager than probably any other activity you can do.

As always, laws do vary from state-to-state and this is for informational purposes only. You should always check with a professional if you need legal advice.

OK great, let’s get right into things.

5 Keys to Getting Great Tenants Into Your Apartment Buildings

1. Always Check Credit History.
This is a must for anyone that has been a professional property manager for some time. Nothing will help display a potential resident’s ability to pay the rent on time than their credit history. The main thing we are looking for here is a good payment history and that they are not overly burdened with debt.

2. Always Check Criminal Background.
Many property managers that do check credit history miss on this one. Always check a prospective tenant’s criminal background. Many times what you will find is that someone with a lengthy criminal history will also have bad credit. So they do sometimes go hand-in-hand. In any event, you do want to make sure you are running a safe, comfortable place for your existing tenants to live.

3. Always Check Resident History & Job References.
Again, many property managers may try to skip this step – especially if there is a good “gut feel” for the prospective resident. But you should always check with their previous landlords and make sure they paid on time and were good residents. You will also want to verify their current employment status by calling their employer.

4. Have an Income Requirement.
This can be very simple. You basically can take the rent and multiply by 3 or 4 times – and that should be their minimum income. This will help show that your prospective residents meet a minimum income requirement to show their ability to pay the rent. You can also have them bring in paycheck stubs or deposit receipts to help support their income stating.

5. Always Have Tenants Pay Deposit & First Month’s Rent in a Cashier’s Check.
If you have done all of your homework above, you may feel that this is not necessary. However, keep in mind that you are renting an asset that is worth tens of thousands of dollars. Have them pay with a cashier’s check for deposit and first month’s rent. You do not want to find out their first month’s rent check did not clear after they have moved in!

By the way, if you liked this article, you will probably like my new report and video series, “The 7 Biggest Mistakes Investors Make When Buying Income Property.”

No Comments