The Benefit of Keeping Common Area Costs in Check
By Jerry Trout
If common area costs don’t make your list of top rental property concerns, you’re not alone. Many landlords and management companies don’t see the need to keep these costs in check. They also don’t look past the capital cost burden of common area improvements. Here’s a few reasons why this thinking can lead to trouble – especially for those looking to get the most out of their properties.
While some management companies may not particularly care about common area costs, there is a large group that most definitely does – the tenants. No one wants to occupy an ill-maintained property. If quality isn’t maintained, tenants will become resentful, especially if they’re paying for it.
It takes seconds now for a tenant to pull up all the rental properties available in its general area. If the tenant feels like your property upkeep is subpar, that may be the straw that breaks the camel’s back, causing the tenant to leave.
Additionally, if management passes on too much cost, tenants may also leave. A proper management company will help you find the balance of proper maintenance and passed-on cost.
You want your tenants always to see you as the best value, not just when their lease is expiring. Tenants don’t get upset about a perceived issue at the end of their leases. It’s something they’ve noticed throughout the course of their tenancies, and if it’s never addressed, it can snowball into them wanting out or wanting to renegotiate.
If you wind up in a renegotiation situation, you may have a hard time discussing value if your common areas are below par, especially if you’re coming to the table with excessive common area costs.
You now are becoming less competitive in the marketplace. If you can’t get the tenant to bite, you must now invest in finding new tenants.
As a lessor of a property, you most likely have a lot of competition. The upkeep of your common areas doesn’t just help you retain old tenants, it goes a long way in attracting new valuable tenants.
Common areas are just as important as the store, office or work space. After the outside of the building, they’re the next important impression on visiting potential tenants. If common spaces aren’t clean, thoughtful or inviting, the fish will pull its way off the line.
By keeping your common areas clean and up to date, you’ll make the decision easier for prospective tenants. Any initial expense of common area costs can turn quickly into profit by helping you acquire new tenants.
Trash removal, janitorial services, HVAC repairs, plumbing, sprinkler systems – all can be looked at to explore cost savings without downgrading service. A professional management company can help you look for economies of scale. Who sweeps the adjacent parking lot or business, or who does their snow removal? There may be some savings in using the same provider.
By shopping around, you can bring costs down, thus lowering operational costs and keeping your property competitive with what you’re able to offer per square foot.
Professional management services can often help you find the balance of keeping operating costs in check while making your property more appealing.
See What Trout Management Can Do for You
Trout Management, an affiliate of Trout Daniel & Associates, is a full-service management company that can help you find the best value and highest return in your rental property. We’ll help determine how to lower your operational costs while increasing the function and aesthetics of your property.
We’ll also determine ways to increase your quality of tenant, maximize your lease for the market, and assist in client retention and satisfaction.
Contact us today to learn more about our property management services.
To contact a TD&A associate, call 410-435-4004