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Stop Applying Residential Approaches to Commercial Property Management

 |  21 June 2022

While the business of commercial and residential property management appears to have many similarities, they are fundamentally different and require a different approach to run successfully, from both a personnel and software perspective.

All too often commercial property management is run with residential property personnel, and legacy software systems - a model that is increasingly agreed to be broken.

As part of a recent webinar, we spoke with Wendy Thompson, owner of Wendy Who? a highly respected professional property consultancy, and Jason Luckhardt, National Manager of NAI Harcourts, the world’s largest network of owner-operated commercial brokerage firms, on why
residential approaches don’t work for commercial properties.

Watch the full webinar or read below for key takeaways:

Why residential and commercial property managers are not made equal

While it may seem like a simple transition, not every residential property manager is made for commercial real estate. And vice versa.

At its core, the driving motivations between leasing residential and commercial assets are starkly different.

“People don't have the necessity in life to have occupied commercial premises, it's a choice that they make, whereas people have a necessity of a roof over their head. So you start off with two very different bases in terms of property management. ”
- Jason Luckhardt.

These differing approaches then directly affect the service offering and landlord expectations associated with the role, which of course then flows through to the job description and ultimately the appropriate personality type of successful candidates.

The role of a commercial property manager is extremely technical and complex, while a residential property manager is largely concerned with efficiencies around property maintenance and tenant satisfaction, 

From understanding legislative requirements in every region they work in, to managing tax, completing accurate lease administration, and ensuring all compliance is met by both tenant and landlord, the role is extremely business development focused.

Being able to interpret macro and micro level reporting and offer timely advice to landlords is another part of the role and requires a person who thinks critically, and is extremely efficient.

Given the difficulty of the role, and the vastness of the responsibilities that fall under it, a key component to the long-term success of the property manager, and therefore the business as a whole, is the need for appropriate available software.

The importance of fit-for-purpose commercial real estate software

“It's so critical to have good systems to be able to help you manage and simplify complexities so that you can focus on the landlord’s investment and maximizing the income to the agency.”
- Wendy Thompson.

When it comes to commercial real estate management, good reporting is imperative.

Whereas a residential property is bricks and mortar and contains one type of tenant, commercial properties can be much more complicated.

A multi-level property may have stacking plans, different business usages, car parking - and unique utilities. In a property such as this the landlord will want to see a detailed breakdown of expenses, track the vacancies, negotiate leases and identify the efficiencies in order to be able to derisk their investment and maximise the value of the asset for the owner.

This requires both a level of macro and micro reporting that residential software simply cannot supply.

"You need a system that allows you to put data in and analyze it locally to look for efficiencies. That's really where you're going to win business”
- Jason Luckhardt

The complex nature of the amount of information required to manage a commercial property portfolio effectively is not only a brain tangle but hugely time-consuming. Having a software system in place that is fit for purpose also greatly reduces the amount of admin time property managers spend inputting information and double-checking data.

A good software system will automate everyday reminders and critical events, ensuring you are reminded of upcoming activities so that you don’t miss a beat, which in turn frees up time to get on with building your business.

“Having a software program that makes it simpler for you at the end of the day is so important.”
- Jason Luckhardt

Of course, there are many services that are the same in managing residential and commercial properties, and this is why so many businesses persist in using legacy residential software with a few workarounds. But given the many unique challenges that commercial property managers face, this model is the business equivalent of fitting a square peg into a round hole.

Check out our latest FREE guide on the ins and outs of making the transition from Residential to Commercial Property Manager and our expert tips like the ones above.


To read more about the key functionality differences between the two, we have already written a blog detailing out exactly what you can get from a CRE software system right here.

But don’t take it from us, read more about how Raine & Horne Commercial made the leap from a residential to a commercial system, and how important having the right software was, here.

Re-Leased is a purpose-built commercial property management system.

Schedule a demo with our team HERE


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