Property management is not just about collecting the rent from tenants and dealing with any repairs for the landlord, it is also about maximising value for your client from their property investment.
This can be achieved in several ways by seeking opportunities to increase either income or capital value, or both. This is known as Asset Management and involves a pro-active approach and focused strategy to property management.
An opportunity may exist where the tenants lease only has, 2-3 years remaining. If the tenant is a good tenant, with a good track record, there may be an opportunity to negotiate a longer lease at an early stage. In return, the tenant may negotiate a reduction in rent but this is compensated by the landlord having the added security of a longer lease, thereby adding value to the investment.
We have been involved with a retail parade of nine units within Newcastle where a number of rent reviews were outstanding from our predecessors. Some of the rents being paid by tenants were below the market level. We undertook a systematic approach to deal with each case, increasing rents but also regearing those leases where only 2-3 years remained, by negotiating longer leases. By dealing with each in turn, it allowed us to secure new levels of rent as evidence for agreeing later deals. Over a three year period we increased the annual rent for the landlord client from around £65,000 to over £104,000. This also resulted in a near 70% increase in the capital value of the development.
If you wish to discuss how we can add value to your investment portfolio then please contact us.