Managing a residential property in Portland is similar to commercial management in many ways. There is still marketing and leasing to be done, maintenance to be kept up with, and tenants who have needs and expectations and require prompt communication.
While property management covers the same types of services, the delivery of those services and the skills and knowledge that’s required is a bit different when we’re talking about residential and commercial investments.
At Performance Properties, we manage all sorts of income-producing properties. Today, we’re talking about what to expect from your professional property managers, whether you’re renting out a residential or commercial property.
Portland Residential Leases vs. Portland Commercial Leases
Finding and managing tenants is one of the main areas where residential and commercial property management is different. While residential tenants are primarily concerned with rent and utilities, commercial tenants are subject to real estate expenses including property taxes, insurance, and maintenance fees.
Commercial leases often include how these expenses are paid, while residential leases are more likely to delineate who is responsible for things like utilities and basic maintenance. A triple net lease, for example, is a type of commercial lease that requires that the tenant pay all property taxes, insurance, and common area maintenance fees. Other arrangements include the gross lease, where a property manager collects fixed rental payments to cover these expenses themselves, and the modified net, where a tenant and property manager split maintenance costs, and the tenant pays the property taxes and insurance.
Since commercial leases are more complex, they are usually longer than those for residential properties. Extending and renewing them is also a bit more complicated. While residential properties simply include an increase in rent during lease renewal periods, commercial leases are often completely re-negotiated.
Maintaining Commercial vs. Residential Properties
Residential and commercial property managers have different concerns in terms of maintenance and repair responsibilities. Since commercial properties are used for business purposes, tenants of commercial properties may require more urgent responses when air conditioning, plumbing, and electrical issues arise. These issues interrupt business and can even cause a company to close temporarily when work cannot be safely completed. It’s not unusual for maintenance work to be done overnight or outside of regular business hours.
With residential properties, there is still a sense of urgency with maintenance, and the repairs are often carried out by in-house or external maintenance vendors. Residential tenants are entitled to more legal protections than commercial tenants, and expect their landlords to take care of providing a safe, habitable, and comfortable home.
Property Management Skill Sets
Residential and commercial property managers require different types of skills. Commercial property managers are more concerned with government regulations and insurance matters. They must also understand the needs of different business owners, in industries as diverse as healthcare, manufacturing, food service and retail. Residential managers are focused on protecting the condition of the home and meeting the needs of both tenants and owners while following the local market closely.
An effective property manager must anticipate and meet the needs of every client, whether it’s residential or commercial.
When you are looking for a professional Portland property manager, make sure you work with someone who specializes in your type of investment property. Don’t choose a residential manager for your commercial property. You need an expert.
We’d be happy to help. Please contact us at Performance Properties.
