Commercial property management is a potentially lucrative way to make money. With a reliable tenant, you should be able to make more money every month than you pay out in expenses. On top of that, you can benefit from enormous property appreciation if you choose a commercial property in the right type of market.
However, if there aren’t many attractive commercial properties in your area, or if there are more attractive commercial properties elsewhere, you may be interested in managing commercial properties remotely. Is this a viable option? And if so, how do you make it work?
Modern Tech and the Realities of Remote Property Management
Thankfully, modern technology makes it easier than ever to manage properties remotely. With virtual tours and online listings, you can do your research on individual properties, and with myriad websites dedicated to real estate research, you can feel confident investing in unfamiliar markets.
Also, thanks to better communications technology, you can delegate most of the responsibilities of commercial property management to a property manager in the area – and still remain apprised of important developments.
The Advantages
Why would you choose to manage commercial properties remotely?
- More options. Some people prefer remotely managing properties simply because it gives them more options. Instead of being confined to considering only commercial properties in your city, you can consider attractive properties all over the country, or even beyond. This greatly increases the likelihood that you’ll find the perfect fit for your needs.
- Better markets. If you start looking more broadly, you’ll have a better option to find the best commercial property markets for growth. Instead of depending on the growth trajectories of cities in your immediate area, you can select some of the areas with the highest potential in the nation.
- A diversified portfolio. Being able to invest in commercial properties in multiple locations allows you to diversify your real estate portfolio. And as we all know, a diversified portfolio is important to maintain stable, reliable returns.
- Extended reach. Some investors like having a footprint in multiple areas because it gives them more extended reach. If you plan on using commercial properties for your own purposes in the future, this could be a major advantage.
The Disadvantages
There are some disadvantages to keep in mind as well:
- Lack of access. If you’re managing a commercial property entirely remotely, you won’t have immediate access to it. You won’t be able to tour it, examine issues associated with it, or visit your tenants in person without incurring significant expenses.
- Lack of knowledge/expertise. You probably know your own area better than other areas around the country. Accordingly, investing in commercial properties remotely means you Dependency on a property manager. Managing commercial properties remotely typically means you’ll need to work with a property manager. This can be a very favorable relationship, but it’s entirely dependent on the quality and competence of your partner. If you end up with a property manager who cuts corners or takes shortcuts, it could actively work against you.
Making Your Strategy Work
So what does it take to make your remote commercial property management strategy work?
- Choose the right partner. As we’ve explained, much of your success in this area is going to depend on your ability to find and work with the right property management partner. Accordingly, you need to invest significant time and energy into finding the best fit for your situation. If you can form a partnership with a talented team of property managers, your job as a remote commercial property owner will get significantly easier.
- Choose the right areas. You have nearly limitless options to consider as a commercial property investor once you open the door to remote possibilities. This opens the door to practically unlimited growth potential, but also investments that could hurt you in the long run. It’s vitally important that you choose the right areas to invest in.
- Be thorough in your due diligence. Managing remote properties is risky in ways beyond traditional property management. Accordingly, you need to be on point with your due diligence. You need to compensate for your lack of local knowledge and expertise, and you need to draw information from multiple reliable sources before making any major decisions.
- Remain proactive. As much as possible, remain proactive in your work. Fix minor issues before they become major ones, set expectations with your property managers and tenants early, and plan for the long term as much as possible.
The short answer is yes, you can manage commercial properties remotely, and you can do it easier than ever before, thanks to new technologies. However, there are some disadvantages to keep in mind when pursuing this strategy, and your due diligence is more important than ever.