As the busy owner of a commercial property you want to save time, and one way to do that is to get your real estate agent to act as your property manager. However, is it advisable? Are they qualified to make sure that your property is properly managed? The answer is that it all depends. There are some commercial property agents who also act as property managers, but you should be careful to make sure that they are qualified to do the job.
The first thing you should find out is whether there are any properties that they are currently managing. They should be similar to yours – commercial and with many tenants. Ask the real estate manager to give you at least 3 references. By talking to owners of properties that they currently manage you will get a good idea of their abilities. You should also look carefully into what is required of you as a property owner. Remember, if a real estate agent also acts as a property owner they will have two jobs, so they may not have enough time to dedicate to the daily management of your building. Find out what they will be responsible for, and what is expected of you if anything.
There are several benefits to getting your real estate agent to act as your commercial property manager. The first is that they have the contacts. A real estate agent is already in the business of finding tenants for properties. This means that they are able to get tenants for your property fast. Good occupancy rates make all the difference – if you can fill vacancies fast you will be able to make more money than if you have units that stay vacant for long periods.
Another benefit of getting your real estate agent to act as your property manager is that he is already familiar with your property. He helped you to buy it, so he knows it quite well and he knows what sorts of tenants are best for it. Real estate managers are also already familiar with some of the tasks that go into property management such as background checks and closing deals.
Many real estate professionals who go into property management eventually find that they are able to make more money managing properties than buying or selling them. They typically make between 7% and 15% of all rents collected and this can be very lucrative.
If you choose to make your real estate agent your property manager it is important to make sure that he not only has the necessary experience, but that he also has the time to do the job. Make sure that your contract is very clear as to what his duties are. He should give you a monthly report about your building as well all rents collected. He should shield you from your tenants – you don’t want to deal with their issues. Lastly, he should be able to advise you on how you can make your building more attractive to potential tenants.