How to Add Value to Your Commercial Investment Property

Owning a commercial property can be a great investment, but many people looking to secure investment property loans struggle to find ways to further increase the value of these properties. Fortunately, there are a few simple ways you can add value to a commercial investment property, and today we will cover some of the top improvement tactics:

Add New Features or Amenities

Amenities are an excellent way to make your commercial investment property more appealing to more people, meaning upgrades like this are sure to increase the value. The amenities that will be appropriate depend on the type of property, but you might consider things like adding a lobby to a commercial space, putting in a gym in an office building, putting in a pool or playground for a multifamily dwelling, installing proper loading doors in a warehouse, or building more parking for a retail space.

Increase Profitability by Reducing Expenses

One of the simplest ways those looking to secure investment property loans can increase the value of any property, including commercial real estate, is to increase profits through reduced expenses. There's no end to the possibilities here, but a few simple things you can do to get started include:

  • Replace inefficient appliances, fixtures, and lights with energy- and water-efficient ones

  • Try to get a lower tax rate by requesting a property value reassessment

  • Negotiate better rates with suppliers, maintenance people, and other associates

  • Upgrade plumbing systems to more modern ones that don't leak

Heighten the Security

Security is important for tenants, clients, and prospective buyers alike, so installing more cameras, hiring security guards, installing padlocks and gates, installing alarm systems, and making other security improvements will only increase the value of your commercial investment property. On top of that, you may even qualify for lower insurance rates, meaning you'll cut costs in other areas at the same time – a great benefit for anyone looking to take out investment property loans.

Increase the Square Footage

Having larger rentable space is always beneficial, and it will both increase the value of your commercial property and increase your rental income – both of which are important for lenders providing commercial mortgages. For instance, if you own a thriving office building, you could build additional units to rent out to new businesses. However, it’s important to note that you must increase rentable square footage in order to benefit from the additional revenue. For instance, if you own a retail space and increase the square footage by expanding the free parking lot, you’ll be increasing value by adding an amenity, but you won’t reap the reward of additional rental income.

Invest in Cosmetic and Functional Upgrades

Upgrades don’t just improve the appearance of a building, and they can also improve its functionality. Both of these translate to a better curb appeal or increased practicality, and that means a greater property value. In terms of cosmetic upgrades, you could install new carpeting or hardwood flooring, paint the interior and exterior, replace old signage, redecorate, or revamp the entire façade. More functional upgrades could include things like renovating lobbies, installing more bathrooms, or making other structural changes.

Adding value to a commercial property doesn’t just benefit you, and it will also benefit anybody who accesses the property, and it will make the property more appealing to future tenants and potential buyers. Some of these simple projects can be done without a large investment while others will require more time and money, but any of these projects will increase the value of your commercial property.