A survey by the NAR found that commercial real estate sales volume increased by 35% in 2021, and it has kept rising since then. This indicates a strong demand for commercial properties. However, owning and managing such real estate is not easy.
Effective lease management plays a crucial role in maximizing ROI for commercial real estate owners in Redwood City, CA. This is especially true when dealing with several tenants, rent payments, and maintenance responsibilities.
With that in mind, here are the best practices to follow to minimize disputes and optimize your bottom line.
Establish Clear and Realistic Lease Terms
Lease terms define the rights and obligations of each party. They include the rent amount, payment schedule, security deposit, and other clauses. Landlords should negotiate these terms with their tenants before signing the lease agreement.
In addition, the lease agreement should be written in clear and concise language. This avoids ambiguity or confusion. Be sure to review the market conditions and adjust the rent accordingly.
Conduct Regular Inspections and Resolve Issues
Performing regular property inspections is a vital part of commercial lease management. They allow you to monitor the condition and performance of your property. They help identify any damages or defects that need to be addressed.
You'll also be able to get feedback from tenants, giving you a better understanding of what they like and don't like. This can help you provide better experiences for your tenants and build a strong relationship with them.
Keep Accurate and Updated Lease Documentation
Proper documentation helps you keep track of all the details and transactions related to a lease agreement. This includes the original lease agreement, any changes made to it, rent receipts, and more. These help landlords track and manage their rental income and expenses.
Documentation also serves as evidence in case of any disputes or litigation. Property managers should store their lease documentation in a secure and organized manner.
Handle Lease Renewals in a Timely and Professional Manner
Renewing leases is a great way for landlords to retain their reliable renters. This, in turn, increases their income while allowing for the lease terms to be updated. To avoid delays, communicate with tenants well before the lease ends.
Offer them incentives or benefits to encourage renters to renew their lease. Options to consider include rent discounts, flexible payment plans, and other perks. Be open to negotiating any reasonable requests the tenant may have.
Deal With Any Breach of Lease Promptly and Fairly
A breach of lease occurs when either party fails to fulfill their obligations under the lease agreement. It can result in penalties, fines, eviction, termination of the lease agreement, or legal action.
Landlords should have a clear policy and procedure for handling any breach of lease cases. Discuss them with tenants before the lease agreement is signed. Also, ensure that you document any breach of lease incidents and actions taken to resolve them.
Enlist a Professional to Help With Lease Management in Redwood City, CA
Proper lease management is a vital aspect of managing commercial properties. It requires attention to detail and skill. And while the above practices help, working with a professional takes the cake.
PMI Redwood Realty is a full-service property management in Redwood City, CA that can help with everything from lease agreements to handling violations. Reach out today to discuss your lease management needs.
