Owning a commercial property in Santa Monica, California, is a significant step towards building a lucrative real estate portfolio and achieving financial freedom.
Experienced real estate investors know there is more to owning a commercial property than just the initial investment – it requires actionable maintenance, rent collection, and tenant management.
This is exactly where a commercial property manager can step in and take these responsibilities off your shoulders.
Before deciding to hire a commercial property manager – or even before buying a commercial building – savvy investors will first understand how much they can expect to spend each month. Estimating how much a commercial property manager costs helps them predict their profits and the success of their investments.
By the end of this blog post, you’ll know how much commercial property management services cost in Santa Monica, California, and the factors that influence this cost. Plus, you’ll have the information you need to decide whether hiring a commercial property manager is worth the investment.
How Much Does Commercial Property Management Cost?
On average, commercial property management services cost between 5% and 10% of the monthly rent.
This is a ranging scale that is influenced by many factors, such as the type of commercial building and the businesses operating in it.
A standard commercial property management company will offer the following services:
- Tenant management
- Rent collection
- Maintenance and repair coordination
- Financial reporting
- Marketing and leasing
- Tenant vetting and due diligence
- Evict lease-breaching tenants
Additional Commercial Property Management Costs
Property owners can also expect additional services and fees from their commercial property managers.
- Tenant Placement Fee – When a property manager finds a new tenant to lease a unit in your commercial property, they often charge a leasing fee which can be a flat fee or a percentage of the monthly rent.
- Lease Renewal Fee – When a tenant renews their lease, the property manager will often charge a flat fee or percentage of the monthly rent.
When calculating how much a commercial property manager costs, it’s important to also consider these additional one-time fees.
What Factors Influence Commercial Property Management Cost?
The cost of a commercial property manager is on a sliding percentage scale of the building’s monthly rent. But what are these influencing factors exactly?
Building Size
You may be surprised to learn that smaller commercial buildings often cost more to manage than larger commercial buildings.
A smaller commercial building requires more hands-on action from the property manager. Since they are responsible for the maintenance and repairs, they may have an in-house team or find contractors to take care of these tasks.
However, a large-scale commercial building, such as an office building, retail store, or apartment complex, requires constant maintenance staff. So, the property manager will hire employees to fill these positions and manage them.
Commercial Building Type
Many commercial buildings require property management. One of the most popular are apartment complexes or large multifamily properties.
However, certain commercial buildings and businesses lead to higher property management fees. Some examples include:
- Medical facilities or clinics
- Food industry businesses such as cafes, restaurants, etc.
- Industrial buildings and factories
- Government-regulated businesses
Commercial property managers have more responsibilities with these properties and the businesses operating out of them, leading them to charge slightly more.
Building Condition
The condition of the commercial building will influence the cost of property management services. The newer a building, the less maintenance and repairs are to be expected.
However, if the building is older, with rundown facilities and amenities requiring more attention, the property management company could charge more to compensate for their time.
Building Amenities
Depending on the type of commercial property, there could be additional amenities a property manager must maintain. These could include a gym, pool, or parking facilities. Additional spaces or areas on the property could lead to increased management rates.
Required Services
Not every commercial property is the same. That means not every property manager will offer the same services. It all depends on exactly what type of maintenance and management your commercial property requires to operate efficiently.
For example, a multi-family apartment complex may require a homeowners association (HOA) committee implemented by the property manager. On the other hand, a restaurant will require a property manager to assist with keeping the building up to the city’s food inspection regulations.
All of these types of services will greatly influence the cost of commercial property management services.
Is a Commercial Property Manager Right for Your Investment Goals?
Your skills focus on making great investment decisions and looking for new opportunities in the local market. To spend your valuable time collecting rent, arranging repairs, and communicating with tenants would be a waste.
Instead, a commercial property management company could handle all of your day-to-day responsibilities. They will collect the rent, communicate with tenants, coordinate maintenance and repairs, prepare financial reports, and ensure your commercial property maintains value.
With a reliable property manager, you can continue focusing on building a lucrative real estate portfolio, knowing that you’re maximizing your ROI in the background.
Maximize Your Commercial Property’s ROI with Inveserve Corp
Are you ready to allow an experienced and professional property manager to take on the daily tasks your Santa Monica commercial property requires?
Then look no further than Inveserve Corp!
With over 30 years of experience as the area’s leading property management company, we have helped hundreds of property owners find financial freedom and success in their real estate investments.
Our team of professional real estate experts is here to provide white glove service to both our owners and tenants. From commercial buildings with residential units to retail stores to restaurants, no property is too big or small for us to manage!
Take the next step and speak with one of our helpful team members today about how we can help maximize your commercial property’s ROI with our management services!
