The Differences Between Commercial and Residential Property Management

1. The Differences Between Commercial and Residential Property Management

2. When researching property management companies, you’ll notice that they fall into two categories: commercial and residential. There are major differences between the two — and only by choosing the right one for your needs will you receive the support and services you require.

3. Leases A lease for a residential property is usually brief, quite standardized, and easy to renew. In contrast, leases for commercial tenants are complex and may feature a variety of extension options. Only a commercial property manager is likely to understand such leases, know how to increase the price to the appropriate amount on an annual basis, and be able to help you if the tenant wants to end the contract early, which is often difficult and will depend on the termination clauses.

4. Tenant Payments • Tenants for residential properties only need to pay rent and utilities. This keeps things simple for residential property management companies. Commercial building tenants, however, are usually required to pay a number of expenses relating to property tax, insurance, and maintenance.

5. Depending on the type of lease, tenants may need to pay all or just some of these expenses. For instance, with a triple net lease, the tenant pays a net amount for all three, whereas with a gross lease, the landlord pays the expenses using fixed rental fees. There are also modified net leases (which are somewhere between a triple net lease and a gross lease) and percentage leases (common for retail malls).

6. Whatever type of payment system you choose, it will be complicated for your property manager. This is why you need someone who is experienced in dealing with lease types, who will understand the clauses, and who will know how to conduct an annual recalculation of costs, if applicable.

7. Availability Residential property managers only need to visit the building for short periods, often on a set schedule. Their main duties consist of collecting rent and carrying out any necessary maintenance. Commercial properties, however, often require much more attention. In fact, if your building is a large office or mall, you may need a manager to be onsite at all times.

8. Tools and Software • Finally, commercial property managers have tools and software at their disposal that a residential property manager would never even need.

9. Managing residential properties is always much simpler than managing a • commercial property in Edmonton. Building owners with anything other than a residential property should always choose a professional who specializes in commercial buildings if they want to prevent problems and receive top-quality services.