Every commercial property is unique and on that basis every property investor will have special challenges to work with their asset. In every property location there will be special factors to consider and challenges to resolve. You can be the specialist for the location to help investors through the challenges that they experience. The value that you can offer through a set of comprehensive property services needs to be carefully considered and promoted.
Know the facts locally
To successfully work with commercial property investors, it is simply a matter of understanding what they are experiencing in the local property market and how you can be the solution that they need. With particular clients you can drill down into the unique challenges of a single property, its ownership, and its location.
So how can you do this? You can do an analysis of property performance and property opportunity. You can provide a real property performance plan based on solid recommendations supported by strategy and opportunity.
What can you do?
As the local property specialist, you can add considerable value to the services that you provide your investor clients. Specialise completely and thoroughly within your location and within a small number of property types. That specialisation will be of great value to the clients that you serve.
Here are some of the most common challenges that you will strike with property investors today. These particular issues all require solutions:
- Timing – Many property decisions will be based around factors of timing. Time will impact property cash flow, rental, tenancy mix, and occupancy. Ultimately over time there will be property based issues that will flow through to changes in capital value. Understand the timing factors for your location when it comes to selling, leasing, and property upgrade. When it comes to selling or leasing a property, you can show your clients the best strategies of timing matched to the challenges within the asset.
- Financing – Some investors will need to change financing strategies and structures during the ownership cycle for a property. There will also be the need for property valuations to support mortgage funds. Understand the duration of financing applies to the clients that you serve. You will need to strengthen the tenancy mix and the rental income to improve and enhance the financing position. The loan value ratio between advanced funds and property value is a ratio to watch.
- Cash flow – The leases within the tenancy mix will support the rental cash flow. Can add cash flow be improved? How does the rental cash flow matched to the prevailing market rentals? You can do a rental assessment and compare the results of the assessment to other properties in the location.
- Portfolio performance – When you delve into the factors of property performance for your client, you can cover off on matters of income enhancement, maintenance management, expenditure controls, tenancy changes, and lease changes. All of these things each year will flow to the end result of property performance.
- Vacancy factors – How can you improve the occupancy rates within the property? How can you find the best tenants to strengthen the tenancy profiles and lease covenants? A good property will be strengthened by the tenants in the mix. Look at how you can encourage and shape the tenant occupancy over time.
- Property maintenance – You cannot own an investment property without spending money. You can however develop a strategy of timing that takes into account known expenditure and the performance of the asset. You can set a budget in place incorporating rates and taxes, repairs and maintenance, capital expenditure, and property renovations. Understand the future of the asset and the maintenance that will be required to improve it over time.
There are some good things here that can be tracked and managed for your investment clients. You can provide some stability and controls to enhance property performance over time.
Understand the asset for what it is, and look at how you can bring change and opportunity to the tenancy mix, rental strategy, lease documentation, and property value. Your clients will appreciate the real strategies that you bring to the process of property ownership and investment.