How to Set Commercial Property Management Fees for Profit

Here are the factors to consider to help you set profitable commercial and retail property management fees in your real estate business.  So what's the problem here?  Many real estate businesses do not take the time to understand the work involved in managing a property, and thereby they set their fees based on a percentage of passing income or rent.  That approach to fees is one of the most limiting factors in the creation of profit and revenue from the property management division of any real estate business.

Think about your client's requirements in management and the design of the property.  Do a full SWOT analysis first before you pitch for the listing.  You can make more money from the properties that you manage if you set a fair fee from the outset.  You will be happier with the profits of the division, and your clients will be happier with the services provided.

Your fees should be set based on the asset and the suitability of all of the following (plus others that you can add):

The size of the tenancy mix Leasing issues within the mix and upcoming vacancies The reporting requirements of the landlord Property market pressures and trends Supply and demand for occupancy Maintenance needs of the asset Budgeting of property performance over time

Set your property management fees with a view to prudence and practicality. In today's podcast, we share the ideas behind being profitable in managing a property for a client.  Don't take on a new listing under management until you have considered the client, the asset, the market circumstances and the issues that will need resolve (they will be there).