Owners of commercial buildings do not always occupy them. Many owners use commercial buildings for rental income, whether using them for an office space, a business home or for a retailer. They must make sure their buildings are appealing to potential renters and will retain those renters over the long term, as it’s much more stress-free when you have long-term renters in place.
They must show value that is competitive with other options in the area, appealing to the masses and ticking all the boxes. Building owners can make at least seven inexpensive improvements to make their buildings more valuable and appealing to renters out there, they just have to know exactly what to focus on.
Here’s our list:
Why Spend the Money on Building Improvements?
In the competitive commercial building leasing market, it is important to provide value for tenants. The building must be appealing to potential renters from looks to function, and make them feel like they haven’t got any risks or challenges within the place. There are two types of improvements to look at as an owner, and the type of improvement makes a difference in taxes.
One type of improvement is leasehold, which is an improvement with benefits for the tenant. This is when a prospective tenant requests improvements in order to sign a lease. This improvement can be depreciated over 15 years.
The second type of improvement is a building improvement. These are improvements that are done for the building in general. These improvements may not be depreciable, but they will help rent the property and improve value.
7 Changes That Are Worth Considering
Small building improvements can make a big difference when it comes to a building owner wanting to run a successful rental space:
1. Consider repairing all damaged windows, perhaps adding more energy efficient windows. Then, protect the new windows with commercial window tinting. Commercial window tinting can help with energy efficiency, cut down glare, and offer privacy for tenants. It will also make the windows stronger and more secure. The tenant’s furniture and artwork will be protected from UV light damage.
2. Improve the lighting in a building by adding or updating light fixtures and switching to more energy-efficient light bulbs, such as LED’s. Make sure to choose the colour and strength of bulbs for best advantage. However, white lighting is usually the most modern choice.
3. Add amenities that tenants will like, such as changing a flat rooftop into a landscaped, usable garden event space. Urban commercial buildings tenants can use the space for meetings, lunch breaks, events, and more. Office buildings could benefit from the addition of a fitness center or a small coffee and food bar in a space that is hard to rent.
4. Make the building systems for heating, cooling, electrical, and plumbing more up to date and energy efficient. Better maintenance of these mechanical systems will reduce repair bills and lower utility bills, giving the building owner a higher ROI. Energy-efficiency improvement can be achieved on older buildings by searching for technologies that can be used to retrofit older building systems. Another goal of retrofitting energy systems is to provide tenants with a healthy and comfortable environment to live or work in.
5. Curb appeal is important, so clean up the exterior areas of the building and lot. Consider a new coat of paint and more-attractive signing. Redo a tired parking lot with resealing and new striping. Improve the landscaping with a few new shrubs or plants.
6. Improve the building security and parking facilities. The parking lot should be paved and have security lighting for tenant safety. Consider a tall perimeter fence, automatic gate with security codes, security cameras, and lots of lighting of different types to make tenants feel safe.
7. Concentrate improvements on the bathrooms, kitchens, and common lobby or lounge areas. New flooring, a fresh coat of paint, granite countertops, and new appliances go a long way in attracting higher-paying tenants.
Maintenance Is Important
Building maintenance is as important as small building improvements to make a commercial building more rentable. The roof, exterior walls, windows, foundation, and all equipment must be maintained regularly. A well-maintained building with small improvements can yield huge benefits to the owner.
What you put in during the early days will see you through with a long, successful career as a building owner. You gotta go the groundwork first before you can flourish!