In 2023, commercial real estate deals dropped to $647 billion -- a 47% decrease compared to 2022 according from data from the Motley Fool.
Experts blame this on high interest rates and falling office values. These challenges make it more important than ever to find ways to boost property income.
If you own or manage a commercial property, this quick guide is for you. We'll share simple tips on lease audit and cost recovery designed to help property owners in Teton Valley increase profits and improve property management skills.
Keep reading to learn more.
Review Lease Agreements Regularly
Check your lease agreements often to ensure all terms, like rent increases and shared costs, are applied correctly. This helps catch mistakes or missed payments. Commercial leases differ from residential ones in that they usually last longer, have flexible terms, and require closer attention.
Do a commercial lease review regularly to find terms that don't fit your property. Update them when renewing leases to increase your income and stay competitive. Keeping leases up to date shows tenants you are fair and organized, which builds trust.
Verify Operating Expenses
Compare the actual operating costs, like utilities and maintenance, to what your lease agreements say. If there are differences, adjust tenant bills to recover any missed amounts and maximize rental income. This ensures you aren't covering costs that tenants are responsible for under the lease.
Track Common Area Maintenance (CAM) Costs
Tracking Common Area Maintenance (CAM) costs ensures expenses are shared fairly among tenants. By checking these costs regularly, you can ensure they match the lease terms and reflect the actual expenses. This helps prevent overcharging or undercharging.
Sharing clear and simple CAM expense reports with tenants helps avoid confusion. It also makes it easier to collect any unpaid amounts. Keeping tenants informed builds trust and encourages them to pay on time.
Implement Expense Caps
Expense caps set limits on certain costs, like repairs or management fees. These limits help keep tenants happy and your property profitable. Here are some Teton Valley property tips to make them work:
- Write clear rules for expense caps in the lease
- Talk to tenants about these caps at the start
- Check expenses regularly to avoid problems
- Adjust caps when renewing leases if needed
Mistakes with expense caps, like unclear terms, missing commercial property audits or poor tracking, can cause disputes. All you need is clear communication and well-written leases. These solutions make managing costs much easier.
Engage Local Experts
Work with local property management professionals in Teton Valley who understand lease audits and cost recovery strategies. They can help you find missed income opportunities and build strong relationships with your tenants. Their local expertise helps you manage your property better and stay ahead in the market.
Maximize Property Income With Lease Audit and Cost Recovery
Lease audit and cost recovery can help you find hidden income and improve property management. By checking leases, tracking costs, and using clear rules, you can increase profits and avoid problems. Use these tips to take your property management to the next level.
At PMI Grand Tetons, we know the Teton Valley because it's our home. Our full-service property management services allow you to get the most from your investments. See how we can help maximize your property income and keep your tenants happy.
