How To Handle Rising Costs in Commercial Property Management
The commercial property sector is not immune to the impact of inflation. While you’re working hard to help your property stand out in the market, costs are rising for everything from routine maintenance to vendor services.
As a property manager, you need a plan in place to handle rising costs, maintain profitability, and keep your clients satisfied. Let’s explore strategies for handling rising costs in commercial property management.
Analyze Your Current Expenses
Everyone’s situation is different. For some, landscaping could be the greatest expense, while others may be dealing with high maintenance costs. By crunching the numbers, you can determine which cost-reduction strategies will make the biggest difference for you.
Start with an expense audit to pinpoint exactly which areas of your property management operations are experiencing the sharpest increases.
Implement Energy-Efficient Systems
Energy consumption is one of the largest, most consistent costs in property management. Transitioning to energy-efficient systems might involve upfront investment, but the long-term savings are worth it. The right technologies can do a lot to lower energy costs. Some options include LED lighting, smart thermostats, and low-flow plumbing fixtures.
Take a Proactive Approach to Maintenance
Preventative maintenance is a nonnegotiable cost-saving strategy. Delaying repairs may seem like a good way to save money in the short term but will often lead to higher expenses down the line.
By staying on top of routine upkeep, you can prevent small issues from turning into costly emergencies. This proactive stance reduces long-term expenses and lowers tenant turnover. Your tenants will be happier when everything works as it should.
Work With Your Vendors
Services like landscaping, HVAC support, and janitorial work are critical yet costly components of commercial property management. Negotiating effectively with vendors is a smart way to keep prices in check without sacrificing quality.
If your favorite service provider is raising their rates, see if you can get a discount as a long-time customer. If not, you might shop around to see if you can save more by switching to another high-quality vendor.
Renegotiate Lease Contracts
Most of these strategies concern lowering rising costs. However, you should also consider methods for increasing revenue. If it’s been a while since you’ve raised the rent, now might be a good time to reevaluate and potentially increase rates.
Increasing the value of your commercial property through upgrades, maintenance, or new amenities can justify raising rates. Just be sure to communicate any changes clearly, and consider offering incentives or improvements to ease the transition for long-time tenants.
Keep Making a Profit With Your Property
With so many tasks on your plate as a commercial property manager, it can be hard to balance client satisfaction and financial success. Luckily, implementing these strategies will help you handle rising costs in commercial property management and keep your tenants happy.
