When maintaining and managing a commercial property, your job is more than just finding tenants and collecting rents. If you’re looking to lease your property to accredited tenants and sell your property to investors with a larger return on your investment, it is absolutely necessary to improve your property in order to strengthen its value. Your property is your investment. Thus, you have to make sure that you bring maximum profit through it.
There are many different approaches that can help increase a property’s value. In this blog post, we’ve covered some of the top techniques you can utilize today to improve your commercial property.
The most straightforward means of increasing the value of a rental property is through structural changes. Making structural improvements not only gives value to your property but also prevents it from falling into a state of disrepair. Ensure the following and make changes accordingly:
- See that there are limited chances of damage due to water, leakage, or moisture issues
- See if there are opportunities that allow you to update the exterior look of your property. If there doesn't seem to be any need for exterior changes, check for any signs of bubbling paint, warping, or loose or cracked panels around the exterior of your property.
- Check your commercial property’s roof conditions. If you do not repair issues involving the roof in a timely manner, your property could potentially accumulate serious irreversible damage that could very well lead to unavoidable costly repairs.
- Check for any other maintenance issues and/or repair work that can make the property more valuable.
Energy Efficient Lighting
Installing energy efficient lighting is cost-effective and can dramatically improve and brighten the space. Adding an LED light bulb can cut down the building’s energy costs by as much as 25-30% — resulting in reduced operating costs and lower utility bills. Your tenants will not only enjoy the benefits of efficient lighting systems but also appreciate its reduced footprint on the environment. After all, it ultimately comes down to making your tenants happy when increasing your commercial property’s value.
Increase Rentable Space
Another way to increase property value is to optimize the space within. If your rental property is still not fully built out, finish the remaining parts by dividing the interior in a way that can create space for more offices and optimize the total rentable space offered in your property. Remember that many accredited tenants prefer a well designed and open space, so you must not make the area too congested and uncomfortable. Furthermore, you can even create storage spaces that can contribute to your rental income if such an opportunity arises. This way, you can service your tenants better and more effectively.
Parking is one of the aspects most of us take for granted. But as a commercial property owner, it’s important to take parking into consideration. With little to no parking area on your premises, the chances of finding reputable tenants drop considerably. Further, tenants that do ultimately decide to rent from you will leave once they begin to outgrow the parking being offered. Hence, if it’s difficult to add parking on your property, try offering parking someplace nearby. Parking area near your building is much more appealing than having no parking at all.
Offer Additional Services
Offering additional services to your tenants can give you an edge over your competitors. For example, you can offer maintenance services like trash removal or cleaning services to your tenants after they sign a lease. Your tenants might just be willing to pay you extra to free themselves from such responsibilities.
Furthermore, having vending machines located on your commercial property can be an additional source of rental income. You can potentially place vending machines in the common areas of your buildings offering items such as coffee, drinks, and snacks. Your tenants will greatly appreciate this as they will be able to conveniently grab a quick bite to eat or coffee to drink at any time of the day, especially during off-hours.
Upon making significant improvements for an added value real estate property, it is the perfect time to increase the rent you charge for leasing space in your property. However, we highly recommend that you increase rent strategically and that you assess the average rental rates for similar properties in your sub-market by working with an experienced commercial broker in your area. Further, we’d advise that you not hike up your rates all at once. Instead, it may be most effective for you to increase the rent gradually throughout a certain period of time.
One of the best aspects of commercial property ownership is the limitless opportunities available to investors to increase the property values of their portfolio. Do the necessary repair work. Add improvements such as energy-saving light fixtures. Provide extra amenities and finally increase the rental rates strategically.
Interested in learning additional efforts that can help increase your commercial property’s value? Get in touch with one of our commercial brokers today to get started!