The argument in favour of keeping property management in-house is now heard loudly, and in the same breath the perceived benefits of outsourcing these tasks is losing its pull.

A big reason for this shift is just the fact there are now systems available allowing landlords to manage their own portfolio.

Re-Leased is one of these systems. It was founded in New Zealand by Tom Wallace in 2012 as a better property management tool that placed automation, design and great user experience at its core.

After an initial product was released in 2013, Re-Leased launched its Landlord App in 2018, providing landlords with real-time data on their properties and portfolios, and a year later the Property Manager App was launched. Because of its success, the company now has offices in Australia, London and New York.

Landlords have long asked what is the best way to go about managing their commercial property or portfolio.

Re-Leased says managing commercial property requires an owner to stay ahead of hundreds or thousands of critical action items every year, including rent reviews, lease renewals, health and safety and legal compliance and property inspections, activities critical to running smooth commercial tenancies.

Landlords opting to manage their own property portfolio need all of the tools they can get their hands on. They need to be accountable to themselves to make sure the maximum potential of their portfolio is tapped into.

Clear Strategy

There are several key processes and procedures landlords need, such as getting the legal lease agreement paper work drawn up; routine inspection structure; tenancy schedule management; maintenance task administration and rent review execution as an integral part of the landlord-owner’s portfolio for self-management.

By managing their own property portfolio they can also increase their yield by saving on property management costs. Whether a single entity or a conglomerate of investors form “the landlord”, there needs to be a clear strategy on how to increase revenue potential.

In order to reap the financial rewards of a commercial property portfolio, having a holistic understanding of how properties are performing is key.

Some landlords focus on KPIs (similar to commercial property managers) which include the following.

Vacany Levels

The ability to stay informed and make the right decisions will come with understanding occupancy level data. Are tenants renewing their leases? Are they signing on for longer terms? It’s important to think strategically as a landlord to ensure properties don’t remain vacant for long. The savvy navigational skills required to rise above tenant retention and tenant sourcing aren’t all that difficult, but there are some key things to keep in mind such as economic changes, development peaks and troughs, as well as shifting tenant demands

Assessing Rents

Having knowledge on rental yields in the same area is important when thinking of the best ways to elevate tenant retention. Regularly analysing and comparing rent against competitor properties will also help provide relevant data to inform landlords on what to do with their portfolio.

Maintenance

It can be time and resource consuming to shop around for tradespeople and compare prices, so having a robust system to document varying levels of cost across trade disciplines will help landlords. Using property management software that integrates with relevant, industry leading maintenance apps will boost efficiency, allowing landlords to focus on addressing tenant requests.

Tenancy Terms

Staying across the portfolio’s tenancy schedules is absolutely paramount – tenant numbers, tenancy renewals and tenancy terms are all important figures to understand. Modern commercial property management software provides the reporting required to visualise this data and take action.

Arrears

It is a given that having rental arrears owed to landlords by tenants will seriously impact cash flow. Minimising and reducing the number of tenants in arrears and keeping on top of collections should be a priority.

Growth

Landlords may watch occupancy levels closely, but is it important to know the actual revenue yield? Monitoring your revenue growth will show you precisely how your business is performing yearon-year. Where are you doing well, and what could be improved? This critical thinking is important.

Profit And Loss

P+L statements are the clearest indicator of the health of a business. It’s crucial for landlords to have a system that can provide reporting around money coming in and money going out. While spreadsheets do the job, landlords are better off using a property management software platform that integrates with accounting software, which will provide the financial insight required to make informed business decisions.

Analysis

Frequent portfolio analysis is good for landlords who look to maximise the potential of their commercial real estate. Many property owners make the mistake of glossing over the review cycle of their annual property tasks, but taking time to conduct a thorough analysis of their portfolio typically surfaces weak areas that need addressing and highlights strong aspects of a portfolio. It is important to know what to keep doing and what needs amending (or reviewing).

The Legals

Landlords must be aware of the legalities involved in managing their commercial property portfolio. Things such as tenant rights, lease documents, contract stipulations and clauses are unique to every commercial property, so having a well-rounded understanding of the main factors involved in managing commercial property is important. It is a good idea for landlords to engage a legal firm to help with the production of all necessary documents, and to gain the legal knowledge required to run their own portfolio.

Landlords can also choose to outsource their property management, and many do. The expectation from landlords is that their property managers should be more than just rent collectors. The role is moving towards being asset managers, rather than just property managers.

Costs keep rising and property managers have to move to be more innovative to reduce these increases, and also maximise returns for landlords.

Choosing A Property Manager

Landlords looking for a property management company should consider a number of issues:

• A property management company that operates under full transparency (detailing their processes and pricing structure) will easily build trust with landlords.

‘In order to reap the financial rewards having a holistic understanding of how properties are performing is key’

• • Looking at how a property management company handles complaints, challenges and all other daily roadblocks, gives a good idea if it is the right fit.
• Does a property management company respond to tenant feedback in a swift manner? If it does it shows a level of care for providing a great service.

On the other hand, if a property management company has a tendency to ignore feedback or take too long to respond to queries, this may spell trouble and ultimately be a bad business fit.

Just like modern accountants who act as advisers to their clients, good property management companies should do the same to build close relationships with owners.

In the various phases of shopping around for the right property management fit, owners should be looking out for signs of how potential property managers service their existing customer base, as well as prospects.

How does the property management company handle arrears? Can it provide some evidence around its process and employee structure? And does it use property management software to manage its landlord’s properties?

While organisation and structure may be something that seems like a given in any business, not all property management companies possess the skill of organisation or have all the right systems in place to make sure owners get the most out of their properties, which is the ultimate goal.