Effective property managers generally focus on 2 things: ensuring that all tenants are satisfied and keeping the property clean, safe, and functional. With that being said, there are some key differences between those who work with residential properties and those who manage commercial ones.
If you are new to commercial real estate ownership, you may not be aware of the various challenges property managers face.
So consider the following differences between residential and commercial property management. Then take some time to consider whether this is a job you can handle yourself, or whether your best move is to outsource the responsibility to professionals.
1. Training and Licensing
One of the biggest differences between commercial property managers and residential ones has to do with their training and licensure. States have different educational and certification requirements that need to be met in order to work as a residential property manager.
Many states have specific licensing requirements that prospective residential managers must meet before taking their first job in the field. Be sure to do your research so you know what license, if any, one must obtain.
However, it’s a little different in the case of commercial managers since fewer states have licensing requirements for managing commercial properties. Be sure to consult a legal professional in your area to determine what kind of licenses are required.
The challenge here is that commercial property management is in many ways far more complex than residential. With fewer licensing requirements, it can be more difficult to find professionals who can effectively do the job.
2. Types of Tenants
Naturally, commercial and residential property managers deal with different kinds of tenants. The responsibilities and expectations placed on these managers differ according to the tenant’s relationship to the property. Every tenant has needs to be met, but in the case of commercial property management, the condition of the space directly affects both efficiency and profitability.
The challenge for commercial property managers is that the property they oversee may have a large number of tenants. Apartment buildings or large retail strip centers may house a diverse set of individuals or businesses that each require a considerable amount of attention.
In fact, your commercial property may require an on-site manager depending on the number of tenants in place. Again, do your research to fully understand what is required.
3. Areas of Expertise
Managing any kind of property requires a basic set of skills. Friendliness, diligence, and responsibility are just a few of the most rudimentary traits needed to successfully manage any property.
While some of the fundamentals are the same, there are major distinctions between commercial and residential management duties. When managing a commercial property, you’ll need a very wide bank of knowledge, as the job itself is far more diverse than residential management.
Much of the additional expertise needed has to do with the businesses that occupy space within commercial properties. The same strip center may contain a doctor’s office, a clothing retailer, and a restaurant. Each of these businesses has unique needs, yet a property manager must be able to understand all of their needs.
On the other hand, residential property management can involve plumbing crises or spats between neighbors at all hours of the day or night. Those who manage commercial properties are likely only going to deal with these concerns during business hours, if ever.
Should You Hire a Professional?
The answer to this question really depends on your experience level and the size or complexity of your commercial property. If you own a multifamily or retail property that has a large number of units, you may benefit from the services of a professional, even if you have experience managing a residential property.
But if you own a small automotive or mixed-use property, you may be able to handle the work yourself.
If you have questions about any aspect of commercial real estate ownership, especially matters involving financing, reach out to our team of experts today.