By Gary Tasman
CEO & Principal Broker, Cushman & Wakefield Commercial Property Southwest Florida, LLC
If you own commercial real estate, chances are, you will require the services of an experienced, professional property management firm to represent your interest. More than 10,000 commercial property management companies do business in the U.S., ranging from single-person operations to national companies employing thousands of people. Hiring the right property management company is just as important as hiring the right broker or employee, and it can be just as challenging.
Role of a Property Management Company
Property management professionals perform a wide variety of tasks such as collecting rent, supervising vendors to maintain the property, ensuring vendor services are competitively bid, paying taxes on the property and providing property inspections, just to name a few. An experienced commercial property management firm does more than just manage your property. Property Managers have a fiduciary duty to the property owner and should always look for ways to increase your property’s value. Good property managers help increase your net profit by maximizing the potential rent income, and minimizing operating expenses.
In today’s complex markets, choosing the right property management firm is one of the most important decisions a property owner can make. Not all professional property management firms are the same, therefore factors such as trust, confidentiality and accuracy should be considered when evaluating a firm to determine if they are the right fit to manage your property.
Above all, a good firm should have a solid reputation for providing services, as well as for honesty and integrity. You are entrusting the selected entity with your asset and all that it requires, including acting on your behalf. The firm reflects you, and in turn, influences the perception others may have of you. As the property owner, you want assurance that the firm you hire has your best interest at heart.
A firm’s code of ethics not only applies to a property owner, but also to the tenants. Personal data of tenants will be accessible to the commercial property management firm you hire. Before considering a firm, ensure there is a policy in place as to how privacy of data is protected.
Pennies matter when it comes to your business, so there is no margin for error. Inexperienced firms may exhibit rounding errors or mistakes when posting payments, which over time will add up and affect your bottom line. Financial integrity and stability play a key role in choosing the right firm. Experienced firms have internal controls established to ensure their accuracy in reporting and help safeguard your assets.
Making the Right Decision
While there are many strong property management firms, many have been started by principals with little management experience. When conducting due diligence, look for firms that exhibit experience in managing properties throughout different real estate cycles. A seasoned firm will provide financial stability to help guide you through good times and bad.
Research internet reviews of the firms under consideration to establish they have a good standing in the community, as well as a good credit rating. A reputable firm will provide references, as well as conduct background checks on its property managers. Knowledge is power and, in this case, your best resource for making a decision on the best firm to represent your interests. Overall, the goal is to seek a firm that is capable of delivering a strategy to maximize the financial health of the property.