What to Consider When Creating Your Commercial Property’s Annual Budget
Owning a commercial property building can be an extremely profitable investment. Miami Beach is a fantastic place to invest in commercial properties like office buildings or medical buildings. While commercial property investment can be a good way to earn money, it does not come without costs. As a property owner, there are many expenses to consider when creating your annual budget, including repair/maintenance costs, insurance costs, and marketing costs. If you are looking for someone to help manage your property and help to create a budget, you need commercial property management in Miami Beach. A firm like JMK Property Management can help property owners to budget their annual expenses to ensure their bottom-line profits are in the green.
Consider Repairs & Maintenance For Commercial Property Management in Miami Beach
The first thing to think about when it comes to commercial property budgets is repair and maintenance expenses. First, it is critical to forecast preventative maintenance expenses that will occur at the property each year. This includes things like HVAC inspections, parking lot repaving, and lighting replacements. Keeping track of preventative maintenance tasks will save you money in the long run, as it will reduce the number of big repairs you will have to do.
Repairs can be a bit more difficult to budget for since you have no idea what is going to break at your property during the year. JMK Property Investment will help you look through your previous years’ expenses as well as industry averages of commercial property repairs in order to come up with a realistic estimate for the budget. Also, if you have older parts of your building that haven’t been repaired or replaced for a long time, it can be a good idea to include these expenses in your budget in order to be conservative. This could include things like a roof replacement or HVAC unit replacement.
If you plan on making any capital improvements such as renovations or adding onto your building, these expenses need to be added to the budget as well. Discussing project plans with a contractor can help property owners determine the amount of money to budget. Also, keep in mind that the IRS treats capital improvements separately when it comes to taxes.
JMK Property Investment has relationships with many independent contractors and suppliers. This means we are able to bid on competitive prices for any work done at your property. Rest assured that you are getting high-quality work for a good price.
Another expense commercial property owners need to budget for is insurance. Typically, commercial property owners will need to get commercial property insurance and general liability insurance.
Commercial Property Insurance – This type of insurance policy is designed to cover your building and the items inside it. The policy provides reimbursements for damages caused by disasters like fire, theft, storms, and floods. In addition, this type of insurance can be used to protect inventory inside buildings. Commercial property insurance is essential because without it, you could go bankrupt. For example, if a fire occurred at your building, the insurance would help cover the costs to rebuild. Without it, you would most likely not be able to cover the expenses.
General Liability Insurance – This type of insurance protects employees and customers in the building from accidents or risks that could occur at the property. General liability insurance protects property owners from things like a customer or employee getting injured on the property and suing. Depending on your property, you might need special liability insurance as well, which provides coverage for things like special events.
Another expense to consider is any marketing costs that you will need to spend to attract tenants to your building. Even if your occupancy rate is 100% at the time you are making your budget, it is still important to account for tenant acquisition expenses, as you never know what could happen during the course of the year. These expenses include things like digital advertising, print ads, advertising on real estate websites, billboards, and more. Your property management company will first and foremost put in their best effort into retaining tenants, even when their lease is close to expiring. Through attentive service and friendly interactions, our goal is to retain as many tenants as possible. If you do need a new tenant at your property, we will help with the marketing process in order to find a tenant who will be a good addition to your property.
Owning commercial property is a fantastic investment, especially in the Miami area. Commercial property management in Miami Beach is one of the services provided by JMK Property Investor. Our job is to help property investors every step of the way, from creating annual budgets to keeping tenants happy. When we help you create your annual budget, there are a lot of different expenses to keep in mind. Some of the big ones include repairs, maintenance, insurance, and marketing costs. An annual budget shows property owners where they can save/cut costs in certain areas. This can help balance out larger expenses. It can also guide decisions like when to start capital improvement projects or how much to charge for rent.
Let JMK Property Investment Handle Your Commercial Property Management in Miami Beach
It is a great time of year to start thinking about the 2021 budget for your investment properties. Start by hiring a property management company with years of experience that you can trust. For more information about the services we provide and how we can help with your Miami Beach properties, contact JMK Property Investment today.