When it comes to determining the value of your commercial property, one of the most important variables to consider is how much the tenant is willing to pay.
Your commercial property’s value is driven by the income it generates, so you need to employ strategies that can increase your cash flow, limit your expenses, and improve the overall appeal of your property.
To increase a commercial building’s value, you need to make smart decisions when doing construction upgrades.
You need to consider the cost of remodelling parts of the property versus the value that it provides to determine if the upgrade is worth the investment.
To help you with your decision, here are the top construction upgrades for commercial buildings that increase rent prices.
1. Add a rentable conference area
One of the best ways to increase cash flow from your commercial property is to add a rentable space that you can charge per usage.
These rooms can be used by tenants as event spaces, meeting areas, or party venues.
Companies occasionally look for event spaces and having one close by, such as in the same building where their business is located, saves them time and effort.
2. Make it environmentally friendly
There is a shift towards more environmentally friendly products and a lot of consumers are looking for more ways they can lower their impact on the environment.
Same goes with prospective tenants. Buyers are interested in the effect of the commercial spaces they are considering on the environment, especially regarding energy efficiency.
Look for opportunities to improve the eco-friendliness of your commercial building. You can look into technologies such as solar power, increased insulation, low-flow plumbing fixtures, and energy-efficient lighting.
In addition, you may be qualified for tax incentives that further make investing in green technology attractive.
3. Increase parking space
One part of a commercial property that is often overlooked by landlords and property managers is the parking space.
As prospective tenants may need to meet clients, a commercial real estate property with ample parking space will be more attractive to them.
Having a convenient parking spot near the building is a huge differentiator, especially if other properties in your area have no parking.
Even if your competitors have better locations, a big parking lot is a good deal since your tenants won’t have to park in an off-site parking garage.
4. Improve curb appeal
The exterior appearance of your commercial building is also a major influencer for a prospective buyer’s decision.
When upgrading your commercial property, make sure to invest time in making your building look good.
This should include a fresh coat of paint and fixing the cracks and blemishes that may drive potential buyers away.
If you have landscaping, ensure that the lawns are cut and the plants are trimmed in a way that is pleasing to the eye of a potential buyer or renter.
If your building has signage, make sure that it is not difficult to read. As it is one of the first things that people will see and identify your building with, keep it up to date and optimise its placement so it can be easily seen by passers-by.
5. Sub-meter utilities
Another huge concern of prospective buyers and tenants is utilities. Most tenants prefer to pay their fair share of the utility bill and no more, no less.
If there is only one meter for the whole building, then the bill would have to be divided among tenants.
Some will perceive it as unfair, thinking that they can end up paying part of someone else’s utilities. For this reason, landlords should sub-meter utilities to bill each tenant for their individual usage.
Improving your commercial property value to increase your cash flow does not have to be a significant change that requires a huge investment. Even the little changes can add up and make your property appealing to potential buyers and tenants.
Chris Woodard is the Co-Founder of Handle: software that helps contractors, subcontractors, and material suppliers secure their lien rights and get paid faster by automating the collection process for unpaid construction invoices.
SUBSCRIBE TO BLOG
Stay on top of the latest property management tips and tricks as well as industry hot topics.