When you take over any new property into your portfolio, the first three or four weeks are intensely busy with tenant communication, property inspections,
maintenance management, and establishing the financial records for ongoing income and expenditure recording.
Here are some things to help you with establishing a checklist that can work for you with your commercial property management control system:
First and foremost you need to understand the cash flow that comes from the rental and the outgoings with each of the tenancies. That will mean a thorough
lease review of the original lease documentation. The lease review that you do will need to be checked against the tenancy schedule that you are being
provided with. When you are satisfied that you have the necessary and correct lease information, you can put that into your commercial property management
Inspect the property thoroughly and completely to understand its physical function and layout. Check out the current levels of maintenance that apply to
the essential services and safety equipment within the building. Talk to the maintenance contractors as part of that process. Look for any breaches of
building safety or maintenance activity. Ask about any orders or notices that apply to the building currently.
In a property with many tenancies, you are likely to inherit some leases that are soon to expire or have expired. You may also have some vacancies in the
property to fill with new tenants. This then says that you should develop a lease marketing strategy for those vacancies.
Review all of the leases and the tenancies to understand factors of upcoming expiry, critical dates, rent reviews, options, refurbishments, and other
important lease conditions. These factors will need to be captured into your property management software program so that you can respond and act at the
right time. Many a property manager has overlooked a critical date only to find that significant occupancy problems and cash flow disruptions result.
Every landlord will have some goals and targets that apply to the function of the property. Meet with the landlord to clarify and qualify those targets so
that they can be merged into the communication and reporting system for the property into the future. You need to know what the landlord requires of the
property physically and financially.
The income and expenditure activity in the property will be vital to help you set and maintain future financial performance. This then says that the
historic performance of the property should be obtained and checked. The current outgoings budget for the property will also have relevance to the future.
Split up all financial factors that apply to income and expenditure so that you can analyze and identify any shortcomings.
If your property is of a retail nature, you are likely to have some further challenges relating to property marketing, tenancy mix, clustering, and tenant
management. It should be noted that shopping center management and retail property performance is far more complex to that of and industrial or office
property. On that basis your fee for professional services with any retail property should be significantly greater.
These are some of the main factors that apply to the Handover process. Over time you can develop a checklist that specifically applies to the different
property types such as industrial, office, and retail. This will help you greatly when it comes to expanding and growing your portfolio as a property
When you work as a professional property manager of commercial or retail property, you will soon know the importance of an effective handover process. You
will however also know how difficult it is to get all the property detail from the previous landlord or manager. Cooperation in the real estate industry is
generally lacking when it comes to the handover process; that is why you need a system of enquiry and probing processes to get the essential property
detail you need in such a short period of time.
Why is all of this such a problem? Generally one property manager requires the fullest detail of the new property but the other is biased towards minimal
involvement. Handover systems are critical to the ongoing property management process. To protect yourself and control the whole transition it is wise to
use a checklist as a tool to capture all the issues and ask the right questions.
When you are under pressure of the moment in bringing in a new property management, the people that you talk to will be from all different levels of
property involvement, and the facts discussed will be numerous; in the larger properties the information gathering challenge just gets bigger. You must
have a way of keeping notes and records through the whole transition event. A general comment made by someone today may be a critical comment in 3 months
time. Ask your questions and make your notes.
So just who do you talk to in the handover process? Here is a list to help you get started:
The landlord that you will be working for in accordance with special instructions
The landlords solicitor who creates the leases for the property
The landlords accountant who gets involved with the monthly income and expenditure activities
Existing tenants in the building
Maintenance contractors in the building
The previous property manager and or leasing manager
The local building authority regards any orders or notices that may impact the property use or occupation directly or indirectly
The local council regards local property usage, approvals, and zoning
The neighboring businesses and property owners
The local titles office for a title search so you know just who owns the property, and where the property boundaries are
All of these people can tell you so much about the location and the property you are about to manage. This is where note taking is of high value as you
gather information; your notes help protect you against dispute or disagreement later. Your notes will also put you on the trail of bigger issues that