You might be wondering how to improve and raise the value of commercial real estate. In order to know where to start, you should consider the property’s future potential in addition to its past performance. Because cash flow is the primary factor in determining the value of commercial real estate, every technique you apply can boost cash flow, cut expenditures, and build equity and value. Here are tips on the best ways to add value to your commercial property.
This may sound like common sense, but it’s a quick and straightforward strategy to boost your property’s value. However, this tip is often overlooked, especially by first-time commercial landlords. Still, when trying to increase rent, you need to tread carefully. It is essential to first investigate the local market. It would help if you charged a competitive rate to keep your building full.
However, always remember that charging too much will result in a significant vacancy rate for your rental property (and, therefore, money). The value of your property will rise if you can expand and charge more for your current square footage.
Make it bigger
Expanding your rental’s square footage can allow you to either attract additional renters or raise your rental rate. Before making any building changes, you must get the necessary planning permit.
As our friends at peakservices.com advise, you can maximize rentable space if an addition is out of the question. A professional surveyor can help you determine the best use of the available space, potentially increasing the amount of money you make. For instance, you could convert a large but underutilized reception area in an office building into a rentable conference room, and an unfinished attic could be converted into a storage area.
Switch the purpose
The value of a piece of commercial real estate may often be transformed simply by shifting the business that occupies it. Imagine, for instance, that you have stumbled across an abandoned factory building in the heart of a vibrant metropolis. It’s possible to get a zoning variance to change the use of a warehouse from industrial to something more lucrative, such as a hotel, condos, offices, or whatever else makes sense at the site.
Increasing your property’s worth may be accomplished in several ways, one of which is by decreasing your operating costs in tandem with bringing in more income. Thankfully, there are a plethora of options for doing so. Get together all of your past invoices for running costs first. Is there anything you could reduce, merge, or do without entirely? In this case, it may be helpful to think outside the box; for example, switching to LED lights or installing solar panels may significantly reduce your utility costs. Modern, secure, energy-efficient windows and doors are an excellent investment for any commercial building, as they not only show that you care about the safety of your renters but also improve the aesthetics of the space by letting in more light and making less noise. And it will also save you money in the process!
The structure on the site itself must be modern, on par with or better in quality than similar nearby structures, and in keeping with the general look and feel of the neighborhood. You shouldn’t underestimate renovations, either, as some upgrades can improve your property’s ROI. In addition, the HVAC system has to be upgraded to meet today’s stringent energy efficiency regulations. Fixtures and systems like water heaters that are kept up to date can add value, too.
Additionally, you could look into smart technology. There has been a growth in the number of “smart” commercial spaces recently. Older structures, however, lack such elements. So, if you want to add value to your commercial property, consider modernizing.
It doesn’t matter whether you’ve installed the newest and greatest eco-friendly features in your building or if you’re charging a fair yet lucrative cost for your space; vacancies will always cause your property’s value to drop. Vacancies and tenant turnover are significant sources of revenue loss in commercial real estate. Use savvy and low-cost advertising methods to get your product in front of your intended audience and boost sales.
Keep it neat
Regardless of whether you own a warehouse, retail outlet, or residential property, keeping the perimeter well-maintained, the façade clean, and the parking lot well-marked are all certain ways to add value to your commercial property. You need to protect your property, too. So, along with pests, the importance of bird control around commercial buildings cannot be overstated.
Have a professional redesign your commercial property in soothing neutrals if it’s starting to seem dated inside. Attracting high-quality renters in this fashion is easy since they can either move in and start running their business immediately or make minor adjustments to suit their own tastes.
Name the place
When you give a piece of commercial real estate a name, it immediately becomes easier for consumers to understand what it is and where it fits in the market. It might be anything simple or something really cryptic. You just want it to be easy to remember. No matter the case, giving the property its own name is the first step in building its own brand and making it more memorable.
You also need to focus on the signs. Putting money into signs almost always increases chances of finding new tenants for your property. Signage on the exterior of a building should be both eye-catching and true to the building’s intended function. You need to make sure the signs are big, bold, visible, and simple to read.
With this guide, you can easily add value to your commercial property in many ways. We hope it has helped you learn about the best option for your property. Whatever approach you use, the result will be an increase in the worth of your commercial real estate.