How to Boost the Value of Your Commercial Property
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If you are among the mass that has decided to indulge in capitalizing on commercial real estate, here are several tips you might want to consider to add value to your investment.
Adding Square Footage to Your Property
While determining the value of a residential property may seem slightly easier for any knowledgeable investor, analyzing commercial real estate can be rather tricky.
However, there are circumstances where both residential and commercial properties are similar in the identification of their value and that is through the amount of square footage the property possesses. Hence, adding additional square footage by way of expansion would ultimately lead to a boost in the said property value.
For any particular reason, the value of a commercial property can be exponentially increased by either adding certain amenities such as offices, a warehouse, a fitness centre or conference room, a business centre with a fax machine and copier, a storefront, or even a coffee bar.
More importantly, should there be a high demand for said commercial property by other potential tenants, adding space could prove to be economically sound. However, proper research and advice by local building management authorities must be sought after before the commencement of any work can begin.
Perform Cosmetic Changes on Your Property
For office buildings and other commercial-type properties, cosmetic improvements could definitely have a major impact on the value of the property. It provides the owner with the opportunity to increase the amount of rent they charge. And given that these exterior makeovers would not cost the owner an arm and a leg, it would not hurt to improve say the lobby, and or repave the parking lot to improve the implied value of the property.
Another way to gain value for one’s commercial property at almost no cost would be to ensure the said property is clean. This can be done by making sure the garbage is consistently and properly disposed of, gardens and lawns are maintained well, as well as making certain there are no funky odours lingering around the area.
Adding a fresh coat of paint doesn’t hurt as it offers an instant facelift without having to make any substantial structural rehabilitation (although it may pay off to do so as well). Furthermore, some new decor elements in common areas, or new flooring can also go a long way in sprucing up one’s building.
Add Modern Amenities
Be it, tenants or new buyers, most of them care about the environmental impact of their commercial lot especially in terms of energy and water efficiencies, as well as environmental footprint.
Explore the potentials in utilizing modern commercial technologies like energy-efficient heating and air-conditioning, solar power, recycled building materials for any upgrades or renovations, and low flow water-saving plumbing fixtures, not forgetting increased insulation, and even energy-efficient light bulbs. The key here is to invest in technologies and ideas that ultimately decrease expenses and environmental impact. There may even be tax incentives to investing in green technologies to sweeten the deal, keep your property relevant in the current consumer market.
Increase Security Features
An alternative way to upsurge the implied value of commercial property for potential buyers or renters is by ramping up security measures like alarms, gates and shutters as well as ensuring the property is well-lit at night, hence making the property more alluring to tenants and new buyers.
Upgrading security will also likely reduce the insurance premium of the property. In some areas, it may even be beneficial to hire private security guards.
Identifying Local Demands
Perform regular research on what is the most current and desirable aspects to potential new buyers and tenants.
Identifying the needs of the neighbourhood and future developments around the area, such as new schools, condominiums, or shopping centres may be key to inevitably realizing the demand and supply of a particular commercial lot.
Find Ways to Scrimp on Expenses
For commercial buildings, owners and buyers are primarily interested in generating income, and one of the easiest ways to do this would be to raise the rent or reduce expenses.
Review all the expenses incurred carefully and analyze them on a per unit basis and a cost per square foot basis, as these are industry standards.
Compare each expense with other properties or simply invest in energy-efficient lightbulbs and other appliances as well as choosing a location adjacent to other attractive facilities, such as neighbouring street markets, malls and free car park area.
Speak to property managers or local experienced property administrators in the surrounding area. If some of your costs are higher than the standards, you’ll know you need to explore ways to decrease them.
The views and opinions expressed in this article are those of the authors and not intended to malign any company, individual or necessarily reflect the official policy or position of any agency or organization. Focal Times is a subsidiary of Maxworld Consulting Sdn Bhd, a regional organization founded by a mixture of agile and experienced corporate finance, venture capital and industrial experts. This establishment focuses on sharing current banking affairs, latest property developments and updates and more.