Increasing the equity in a commercial real estate property usually requires increasing the net operating income (NOI). This can be done by generating more income or by better managing expenses through improved property management. Chicago has many opportunities to improve property use and management.
Upgrades that make your property more desirable to tenants allow you to raise rents and effectively increase your NOI. Let’s look at a few ways to maximize this potential.
Improving the Commercial Property
Adding amenities to make your property more appealing allows you to increase rates and occupancy. Improving amenities doesn’t have to mean a major overhaul. Something as simple as adding a playground in a multifamily property can make your property attractive to more renters. Know your tenants and look for amenities that make their lives easier or adds value in their eyes.
In most areas today, adding security measures makes the property more desirable. Adding an automatic gate with a punch code to get into the property tells your tenants that you care about safety and helps them feel secure. Additional security features like alarm systems, cameras, and shutters not only increase your property value, they may also lower your insurance premium.
If the neighborhood surrounding a property has changed since the property was purchased or built, a highest and best use analysis may be in order. A change in property use can have a big impact on the property value and rental rates.
This is an area where an accredited property manager can help you. Determining the highest and best use is more complicated that you might think and requires solid data on the surrounding neighborhood, rental rates, property use, etc. The best use of your property might require:
- Changing the present use
- Zoning changes
- Razing the property and rebuilding
While you may not want to do any of these things, you should know the potential of your property before making decisions. When it comes to real estate management, Chicago property owners should always consider all options.
Increasing Equity through better Property Management
Increasing NOI and managing expenses will increase your property value and equity. Poor management has the opposite effect and can cause your property value to fall quickly.
A well-managed property will have a higher occupancy rate and will retain tenants. Rents are at their optimum and expenses are well-managed. If you are not able to manage your property to obtain maximum rents and occupancy, it is worth looking into hiring an accredited property manager. There are many Chicago commercial real estate management companies that specialize in this type of work,
although GNP Realty Partners management team has the first-hand experience you need to make the most of your property through real estate management. Chicago based GNP is an Accredited Management Organization® (AMO®)–one of less than 550 elite firms nationwide to hold this prestigious accreditation. We would be happy to discuss your particular property or your management needs with you. Give us a call at 312-329-8400 or contact us today. Let us show you the possibilities.