Should You Become a Commercial Property Landlord?

November 30, 2021
commercial landlord

Key Services to Look for in Quality Commercial Property Management

Working with an accomplished team of professional commercial property managers can significantly impact your vacant periods, profitability and overall peace of mind. But it is important to choose the right company and ensure they have the sufficient skills and resources to represent your investment.

Let our experts explain how a property management service can add value to your rental portfolio and what to look for before you commit.

The Benefits of Commercial Property Management Services

Having your property managed by a competent firm authenticates a rental business, whether you have one property or a broad portfolio, making it more appealing to quality tenants.

Some of the main advantages include:

  • Shorter and fewer void periods – finding new tenants can be difficult. A property management team will deal with references, viewings and deposits, and market the property to the ideal demographics.
  • Longer-term tenancies – commercial property managers don’t take on the first potential tenant but work to match the right person to the right space for their business. Getting that mix correct means tenants who stay for longer and are satisfied with the quality of the service offered.
  • Year-round management – a management firm will take over arranging maintenance work, calling out emergency tradespeople over holiday periods and protecting deposits according to government approval schemes.
  • Professional valuations – marketing a commercial property includes an analysis of the rental value, recommending an optimal time to increase the rates, and actively marketing the property to command the right income level.
  • Access to respected contractors – local property management firms work with networks of trusted tradespeople and can often negotiate a competitive price and monitor safety obligations to verify that any required work is to specification.

With these practical benefits, owners have less exposure to legal liability, late payments, tenancy disputes or any other issues in line with professional standards and commercial rental sector law. As landlord regulatory requirements become more complex, the time required to control each aspect of the property continues to grow.

What to Look for in a Commercial Property Management Company

Understanding the potential returns on a property management service is one thing; identifying the ideal team to work with is another! Here are the requirements we suggest you prioritize, or at least ask about during the initial consultation.

Commercial Property Management Track Record

Local professionals with in-depth knowledge of the area and market are far superior to online-only services. If your commercial property manager has an outstanding reputation and a file of long-term landlord clients, you will usually be able to ask for references and hear first-hand from fellow property owners.

Consistent Low Vacancy Rates

Property owners need to know that if they are paying for a management service, their returns will pay dividends on that investment. Low void periods indicate a successful marketing approach, an underlying understanding of the best ways to promote a vacant property to the right tenants, and the ability to swiftly close an agreement to the satisfaction of all parties.

Some larger agents publish data about the volume of properties they manage, but it’s more meaningful to ask about vacancy metrics than the numbers of buildings.

Management Fees

A credible commercial property management team will always be upfront about fee structures – because they know that a well-managed property will produce higher rental yields and/or profits. Be conscious of ‘additional services’ and confirm that everything you need has been included in the price so you aren’t hit with unexpected supplementary charges.

Services Offered

Comprehensive property management covers a wide range of services, such as:

  • Valuations and setting rental values
  • Tenant screening and selection
  • Moving in and out processes
  • Collecting rent and deposits
  • Managing inspections and compliance issues
  • Maintenance and repairs
  • Legal issues and disputes

The ideal is to have a range of services so you can pick and choose the level of involvement you wish your property manager to have – and which tasks you’d like to retain control of yourself.

Comparing the Costs of Self-Managed and Professional Commercial Property Management

Many landlords don’t delegate their commercial property management to an experienced agent because they are concerned about denting the value of their income. Self-management is possible, but it’s important to be mindful of the volume of tasks, time requirements, and pressure involved. If you are dedicated to running a commercial rental property business as a sole focus, it may be convenient to save money on management, provided you have the capacity.

For example, self-management includes:

  • Being on call 24/7 to deal with emergency maintenance requests.
  • Chasing late payments or negotiating on rental arrears.
  • Arranging periodic inspections.
  • Staying updated with changing legislation around rental laws, physical building standards and taxation regulations.

Landlords with multiple properties, those with separate career commitments, or commercial property owners who want to spend more time enjoying their returns will benefit from a commercial property management service. They don’t need any active involvement with the rental business unless they wish to and find that maintenance costs and non-compliance risks are considerably lower than through self-management.

Full Commercial Property Management

Having a commercial property management company draft your tenancy agreements, manage potential issues and remain up to speed with regulations is a substantial advantage to busy landlords and ensures you receive a better rental income with more sustainable returns.

For more information about commercial property management in the Edmonton area, please get in touch or drop in and visit us at your convenience.



Becoming a commercial property landlord often crosses the mind of those who are new to real estate investing or even those who have owned rental properties for some time. For most investors, this is not a decision that should be made lightly. That is because owning and managing residential rentals is very different from owning and managing commercial properties.

By definition, a commercial property could include retail, industrial, office buildings, commercial condos and mixed-use buildings. There are things you must know so you can manage these types of buildings well. You must carefully consider the pros and cons of investing in commercial properties if ever you decide to do so. This article will give you a closer look at both, as well as give some tips for becoming a good commercial property landlord.

The Pros

One of the strongest attractions for investors is the income potential of investing in commercial real estate. Even when initial investment in commercial property will be much higher than single-family residential rentals, a higher annual return on your investment can be expected. A multifamily apartment building that houses several tenants, for instance, can potentially give you rental income that exceeds your costs, ensuring a tidy net profit each month.

Many investors like investing in commercial rentals because it allows them to interact with their tenants more professionally. If you own retail or office buildings, your tenants will be business owners, which will help you keep your relationships with your tenants polite and professional. Business owners are also more likely to keep their rented spaces in good shape, especially if they offer products or services to the general public. This can help you more easily maintain your property’s condition over the long term.

The Cons

As with anything, the benefits of owning commercial rental properties also come with their own set of concerns. The larger initial investment you must make to purchase a commercial property is already a given. But there are other costs and risks involved as well.

If there are more people using a building, naturally maintenance and repair needs will also increase. Managing property maintenance for one or more commercial buildings can be expensive and time-consuming, so you must have the budget and the dedication to do it.

Another risk related to commercial rental properties is the risk of injury. In the same way that an increase in the number of people will increase maintenance costs, it increases the chance that someone will get hurt or do intentional damage to the building and grounds as well. Aside from getting quality insurance to protect you from such risks, it may also be necessary to litigate injury claims or other lawsuits more often. If you are very risk-averse, you might want to rethink being a commercial property landlord.

Tips for a Commercial Property Landlord

If you do invest in commercial properties as a new business venture, it is important to start on the right foot. Here are a few tips for success as a commercial property landlord.

  • Start with Residential Properties. It is more advisable for those who are new to investing in rental real estate to start with single-family rental properties before moving to commercial buildings. Owning single-family properties is usually less demanding overall.
  • Be Proactive About Maintenance. As the saying goes, an ounce of prevention is worth a pound of cure. Stay on top of maintenance and repairs so you can keep your tenants in place longer, as well as protect your property’s value.
  • Mitigate Risk. Make sure you bring your property up to code, especially when it concerns your tenants’ health and safety. An alarm system, sturdy locks, and even a fire sprinkler system are good investments to manage risk.
  • Learn to Negotiate. Commercial leases are less predictable than those used for residential rental properties. You can negotiate almost anything. Find a trusted expert to draft your lease documents. At the same time, work with your tenant to reach a mutually beneficial agreement.

In the end, only you can decide whether you will invest in commercial rental properties or not. Most commercial property landlords find the job challenging, with competing demands on their time. But the payoffs make it all worth it.

Are you looking to add a new investment property to your portfolio? Servis Realty Inc is your solution. Our property managers work with investors like you to help you find off-market deals, efficiently manage your property, and much more! You can call us at 780-415-5414 or contact us online.

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