Commercial real estate has always been an attractive and lucrative investment business. Its value has further increased with the increasing density of small businesses. The cash flow in commercial real estate business primarily depends on your strategy before investment and the potential of property to increase the value.
The following tips will help you add value to your commercial property in order to make the most out of it.
1. Make the Right Type of Improvements
There are two types of property improvements.
- Cosmetic improvements
- Substantial improvements
New carpeting, wooden floor replacement, new paint, new landscape, new décor, wallpaper, and other such changes contribute to cosmetic improvements. Cosmetic improvements are beneficial when you rent out your commercial property. However, if you want to sell it out then remember that the buyers may want to change the look and personality of the property. In such a case, avoid making substantial or functional improvements like renovating the lobby of office or multi-home building, and structural changes to the façade of a shopping center.
2. Monetize the Property with Rentable Square Footage
In commercial property, the usable square footage is the door-to-door and wall-to-wall space that is actually used by the tenants. Lobbies, storage rooms, hallways, rest rooms, stairwells, and other shared areas are not included in the usable square footage.
In contrast, the rentable square footage is the sum of usable square footage and the shared spaces. Rentable square footage rule applies when a tenant takes a complete portion or unit on rent. The landlords mostly bear the loss when they rent out a commercial property based on usable square footage. However, you can monetize the property and earn from its every square foot by transforming a multi-unit property into a set of individual properties. This way, the renters will not share spaces like hallways and stairwells and pay full cost for the unit.
3. Add Personality
The landlords can add personality to the commercial property by merging documental and physical personalities. Brainstorm about a nice name for the property. Define the characteristics of the name to renovate the exterior including paint, external landscaping, and introducing charming attractions or amenities to the property.
Some of the cost-effective amenities include free wireless internet, daycare and swimming pool for kids in commercial residential properties, and glass-walled meeting room in the office building.
4. Invest to Decrease Expenses
The modern offices comprise of green buildings. Similarly, the families prefer energy-efficient homes. In either case, you can make lucrative investments in the office or residential commercial real estate to decrease the utility expenses and make it an attractive property for renters and buyers. Some of these investments include large glass windows for sunlight free flow, energy-efficient light bulbs, and energy-efficient kitchen.
Security, a primary concern of the buyers and renters, can add great value to the property. For lucrative investments, install CCTV cameras in the building. If you want to go an extra mile for security then installing walkthrough gates and digital entrance and detection devices could be a good investment to add value to your property.
For information on Borelli Investment Company’s commercial property management services, contact us today.
