Maximise your commercial property returns
How to maximise rental returns on your commercial property
Commercial property investment can offer great rewards, but to maximise these returns, you’ll need to be proactive and efficient.
Here are some tips to help boost your returns and get the best rent for your property:
• Minimise vacant periods – As they say, an empty building won’t pay the mortgage. Offering a longer lease is one option but first and foremost you should look for good quality tenants who pay their rent and look after your property – then do what you can to encourage them to stay.
• Listen - Get feedback from your tenants when then leave. Ask them what they were happy with and what they weren’t. This will help with the next point.
• Know your target market – Understand their needs and tailor your property to meet them. This will help you attract the best tenants at the best price.
• Consider new ways to arrange space – shared spaces are becoming increasingly common and can be a good way to increase rental returns. However, it’s important to remember that one good tenant is better than five bad.
• Care for your property – If you want good tenants to pay a good price, enhance and keep up with the maintenance. This will encourage them to look after your property too, thus securing the future value of your property.
• Value-add to your property – Is there any wasted space? Make it useful. Take a look outside – extra car parking and outdoor storage can add value to your property, which adds value to your tenant, and the rent you can ask will reflect this.
Don’t forget, a lower purchase price usually means lower rent. But it also means lower mortgage payments, which can still mean a good yield and increased cash flow.
Finally, take it from us; a good property manager is worth their weight in gold. Read more on choosing a commercial property manager here.