Being a successful landlord and property investor often depends on your ability to gain leverage during lease negotiations.
Lease administration is essentially the act of ensuring that the terms of your lease are being followed by tenants. When a lease comes up for renewal, you may have to engage in lease negotiations. How you deal with lease renewals can have a huge effect on your day-to-day as well as your bottom line.
Today, we'll give you a quick rundown of the steps you need to take to properly navigate lease administration and negotiation. Follow along and you'll better understand how to manage your property and tenants.
Understanding Lease Agreements
Lease administration requires you to understand the ins and outs of lease agreements with your commercial tenants. These are legal documents that outline the rights and responsibilities of both parties.
They cover rent payments, terms, lease renewals, maintenance, and other responsibilities. A thorough understanding of legal and regulatory matters will put you in a better position. Operating without such understanding could land you in financial and legal trouble.
Record keeping is a massive part of successful lease administration. There are plenty of documents involved, so staying organized is a must. You should have all agreements, correspondence, and other documents ready to pull at a moment's notice.
Why is record keeping important? If you ever run into disputes or concerns with a tenant, having quick access to your lease documents can help answer questions and settle issues.
Managing Tenant Relationships
Lease administration involves relationship management. You need to communicate with your tenants and respond to inquiries. When they know they can trust you, you'll keep tenant happiness high.
Performing regular inspections will help you maintain the property. The more on top of maintenance you are, the more value you'll bring to your property. Not maintaining it will result in costly repairs, poor tenant relationships, and a downturn in your property value.
Collecting rent is a big part of lease administration. You need to have a consistent process when collecting rent. Often, this involves setting up an automated system or hiring a third party to deal with it. You should also be tracking late payments and opportunities to raise rent.
Lease Renewal Strategies
If you review your lease agreement regularly, you'll ensure your property stays competitive in the local rental market. Stay in touch with your tenants throughout the lease and start the lease renewal process before the current lease is up.
Making improvements to your property makes it easier for tenants to swallow rent increases. Incentivizing them to renew their lease with amenities and improvements to lease administration will help to lower vacancies.
How Property Managers Help With Lease Administration
There's nothing easy about lease administration. Lease negotiations and management can be time-consuming and frustrating. If you want to make your life easier, hiring a property manager is a great idea.
For those in Glenview, IL, PMI Metro And Suburban can help. As a top full-service commercial property manager in the country, we offer everything from lease management to accounting. Contact us today to learn more about what we do.