How to Increase the Value of your Commercial Property
Purchasing a commercial property is an excellent investment that can provide significant financial benefits, but the value of the property can fluctuate over time. Whether you’re planning to sell or rent out your property, learning how to increase the value of your commercial property is crucial to maximising your returns.
In this blog, we’ll explore several practical strategies that can help you enhance the value of your commercial property. Whether you’re a seasoned investor or a first-time property owner, we hope you’ll find plenty of valuable insights and actionable advice in this guide.
Revolve Commercial is the number one destination for people who want to work with a commercial real estate buying agency. We make property investment easy and hassle-free because we give our clients a priceless foundation of knowledge from which they can build their portfolio. And we don’t stop at education. Contact us or Book a call today.
10 Ways to Increase the Value of your Commercial Property
1. Expand the area
Increase the floor area by adding more square metres to the property or restructuring unused spaces such as galleries, hallways, and storerooms. Ensure you obtain the necessary approvals and permits from the local council to make these changes. More spacious properties are more appealing to potential buyers.
2. Improve the building’s appearance
Enhance the property’s exterior by repainting, cleaning, and maintaining its various aspects. Pay attention to any outdoor areas, parking spaces, restrooms, lounge areas, and hallways. Regularly hire commercial cleaners and pest control services to maintain a clean and inviting environment.
3. Update existing amenities
Modernise the building by adding eco-friendly features like solar panels, rainwater harvesting systems, and rooftop gardens. Upgrade outdated systems such as heating, air conditioning, ventilation, lifts, and lighting to create a more sustainable and energy-efficient property. More and more people are becoming environmentally conscious and this will make the property more attractive to buyers concerned about climate change.
4. Boost curb appeal
Improve the property’s signage, making it easily visible and identifiable from a distance. Ensure parking spaces are accessible and well-lit. Enhance the entrance pathway, flooring, and landscaping with professional help. A well-presented property with a visually appealing exterior attracts more customers and potential buyers.
5. Increase rent
Adjust the rent in accordance with market trends and include an annual rental increase clause, considering inflation. This strategy generates better cash flow from the property, making it more appealing to buyers. However, be sure to always avoid charging beyond the fair rent value in the market and consider the needs of your tenant.
6. Enhance security
Install a robust security system, including surveillance cameras, high-security gates, and alarm systems, to protect the property from theft and vandalism. A secure environment makes the property more attractive to potential buyers.
7. Retain long-term tenants
Encourage tenants to sign long-term contracts with lease terms favouring the landlord. Make tenants responsible for certain outgoings to ensure a positive cash flow. A property with stable, long-term tenants is more desirable to potential buyers.
8. Reduce outgoings
Adopt smart technologies and eco-friendly practices to lower expenses and increase the property’s value. Implement Internet of Things (IoT) systems to optimise energy usage and other resources, reducing costs and making the property more attractive to buyers.
9. Enhance structural reliability
Address structural issues in older buildings by hiring a professional to restore the property. This may involve repairing leaks, cracks, and damaged parts. Buyers are less likely to purchase a property with structural problems, so addressing these issues is crucial.
10. Reconfigure the space
Add or divide spaces, change the building’s purpose, and add amenities to increase the property’s value. Consider adding parking or storage spaces, finishing unfinished areas, or repurposing the building for a different use. Additionally, incorporate amenities like fitness centres, conference rooms, or coffee bars to make the property more appealing to potential buyers.
What are outgoings on commercial property?
Outgoings in commercial property refer to the various expenses associated with owning, maintaining, and operating the property. These expenses can be incurred by either the property owner or the tenant, depending on the terms of the lease agreement. Some common outgoings in commercial property include:
1. Property taxes
Taxes levied by local authorities based on the property’s assessed value.
Premiums paid for coverage of the building, public liability, and other risks associated with the property.
3. Maintenance and repairs
Costs incurred for the upkeep and maintenance of the property, such as cleaning, painting, plumbing, and electrical repairs.
4. Utility bills
Expenses for services like electricity, water, and gas consumed by the property.
5. Property management fees
Fees paid to a property manager or management company for overseeing and managing the property.
6. Service charges
Costs associated with shared facilities or services in a multi-tenant property, such as common area maintenance, security, and waste disposal.
7. Landlord’s legal and professional fees
Expenses related to legal matters, such as lease negotiations, dispute resolutions, and engaging professionals like solicitors or surveyors.
8. Building upgrades and improvements
Costs incurred for improving the property or complying with regulations, such as accessibility upgrades, fire safety systems, or energy efficiency measures.
It’s important for both property owners and tenants to be aware of these outgoings when negotiating lease agreements, as they can significantly impact the overall costs of occupying a commercial space. Many of these outgoings will be paid by the tenant, while others will be paid by the landlord. It must be clear in the lease who is supposed to pay for each outgoing expense. Reducing your outgoings is a key component to increasing the overall profitability of your commercial property.
Contact Revolve Commercial Today if You Want to Increase the Value of Your Commercial Property
At Revolve Commercial, we are dedicated to helping our clients navigate the complex world of commercial property investment. As leading commercial buyers agents in SE Queensland, our team can guide you through these strategies and more, tailored to your specific goals. By partnering with us, you can be confident that you have the support and expertise needed to unlock your commercial property’s full potential and achieve the best possible returns on your investment. Contact us today or Book a call to find out more.