Commercial Real Estate: Starting Out – Updates, Fixes And Upgrades with Minimal Capital

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Maybe we should hang some balloons out front?

Greetings from the metropolis of Cedar Crest, NM

I love living amongst the pine trees. Pine trees give off the most amazing aroma…especially after a rain.    Something I try to not take for granted.

Anyway….

There are several things our property management company, Jaxon Texas Property Management, focuses on.  But the one thing we take pride in is that our assets looks great on the outside and inside.  One particular asset we have is a mobile home park in Texas.  If you know anything about mobile home parks (the politically correct way to label it is Manufactured Housing Community) the one thing you probably know is most of them look like dumps.  I must say, Jaxon Texas has done an amazing job keeping the park looking great and appealing to the eye.  Obviously, keeping the park looking good is what attracts and keeps tenants.  So…it is important how a property looks.  Whether it is a “C” property or an “A” property, “good looks” are key to being successful in commercial real estate investing.  So…here we go

Whether you just purchased your first investment property or you acquired your 100th, updating is a great way to attract better long-term tenants, retain existing tenants and increase the value of the property. But, in these times, many people are focusing on updates that do not require substantial capital or investment. This article will highlight a few easy and inexpensive fixes that can net high returns.

Fixing The Inside
There are a few easy fixes and upgrades to any property that can allow you to increase your rents, which increases your income.

1. Paint—A new coat of paint goes a long way. If your property is smaller, this is even something you can do yourself. Pick warm earth tone neutral colors. If you have a multifamily unit, tenants can easily imagine their residential belongings in fresh taupe or white rooms. If you have an office building, warm neutrals bring an inviting but professional feeling to the space. To save money, you don’t have to hire an expensive contractor. Shop around. You may be able to find college students on summer break who work quickly and inexpensively.
2. Fixtures—Simple and classic goes a long way. Every space has lights. Most home improvement stores offer modern light fixtures for $10-$30 that can really change the way a space looks. Cabinets, doorknobs and other pulls can also easily be updated for a small investment.
3. New flooring—If you have a multifamily property, ripping out old carpet can be time consuming. However, there is substantial value to offering hardwood floors to renters. For office spaces, hire a professional carpet cleaning service. Keep carpet cleaning contractors on retainer to revisit the space every six months and you may even get a discount.

Fixing The Outside
Many tenants make an initial decision from the street. If your property is overgrown or the landscaping is not up to par, it can steer tenants away. From a tenant’s perspective, if you don’t keep your landscaping up to snuff, why would you take care of anything else in a timely fashion?

1. Plant a few perennials—These are low maintenance plants that add a welcoming feeling to your property.
2. Mulch—This will keep weeds at bay and keep your property looking fresh. Mulch can also help mitigate erosion and foundation damage to your property.
3. Clean the Gutters—It sounds simple, but is well worth it.
4. Fix and paint the pave parking lot/trash can bay/dumpster area—People always take out the trash and park their cars. If these historically dirty areas look good, it makes everything look good.
5. Trim surrounding trees and plant new trees—This will help keep your property looking good and prevent future damage from acts of nature.

Cleaning up the inside and the outside will make your property increase in value and allow you to attract the right kind of tenants. And, you can make these fixes without spending all the income you receive from your renters!

Until next time…..rob

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