Forward planning is a vital part of any property management program, as it helps ensure that everything from maintenance to vendor relationships to capital improvements are evaluated and properly managed. This same approach can pay big dividends during property due diligence prior to an acquisition -- potentially saving an owner from serious pitfalls.
When brought into the acquisition process early, a thorough property management company can provide valuable intel on deferred maintenance, property tax issues, needed capital improvements, and other operational issues that can impact a property’s value. During the due diligence period, a property manager could review existing tenant leases and determine that there are certain co-tenancy clauses that allow a tenant to terminate their lease if an anchor tenant closes or that a tenant is owed a sizable future rent concession. That information can then be utilized to determine risk factor for the investor and can also assist during negotiations to secure pricing that reflects those operational risks.
A similar approach can support operational goals during a property repositioning. A property manager can assist in market evaluation and helping to determine which renovations will provide the biggest payback. They also can oversee the renovations, from reviewing bids to selecting contractors and overseeing the work to ensuring owners’ goals are met during the construction. This type of end-to-end property due diligence and management approach provides significant value and consistency for the ownership. It also provides tenants with a single source of contact for understanding how the renovations impact their business.
Tips for finding a Chicago Property Management Firm
When searching for a professional property management partner, owners should dig deep into understanding the company’s approach to management and due diligence. Look for a management company that will:
• Have the experience and credentials to successfully manage your investment property.
• Manage each property from an owner’s perspective, keeping a watchful eye on expenses, long-term budgets, quality of vendor workmanship, and the overall tenant experience.
• Always keep the owner’s best interest and investment goals in mind.
• Provide accountability, including regular reporting and detailed documentation on building maintenance programs, incident reports, service partner agreements, and other factors.