When buying commercial property, it’s vital that you know what you can do to increase its market value. This is why it’s important for when you’re searching to look for its historical significance as well.
However, the increase of your commercial property value is mainly due to the amount of revenue it brings in, which makes it important for you to figure out how to decrease the costs of it, as well as increasing the rental value of it.
In this guide, we will cover five major ways you can add value to your commercial property and turn it into a cash cow along the way.
- Decrease Your Property Costs
Some of the best ways to increase your commercial value are to take a step back and decrease the costs you put into it. For example, if you have a high energy bill, replacing your old light bulbs with energy efficient ones can help cut your bill in half. Another course of action you can take is to bill your tenants individually for gas, which could drive your monthly spending down exponentially. In truth, there are plenty of ways for commercial property owners to reduce their property costs without affecting their operations at all.
- Increase Your Rent
You can increase the value of your commercial property by increasing the rent of the property itself. First, research in regards to how much your tenants are paying, from there see if you can increase the rent in small amounts. However, always make sure you can justify the rent increase, or else you may lose tenants.
- Improve Your Property
Improving the quality of your building can drive up its value. You can make either cosmetic repairs or upgrades to the building itself like installing new doors or updating the bathroom stalls. Cosmetic repairs like repainting, putting down new floors, or putting up new wallpaper will not only make your tenants more appreciative but can also allow you to increase the rent, which will put even more money in your pocket.
- Improve Your Parking Lot
This is perhaps one of the most overlooked methods of increasing property value. If you do have a parking lot, you can increase its value by adding certain security features. Consider installing alarm systems, gates, or security guards to attract new tenants. These safety features can also help to lower your insurance premiums.
If your property does not have a parking lot, think about adding one nearby your property for your tenants. Having a parking lot can not only make your tenants happier but also increase the value of your commercial property.
- Make Your Building Eco-Friendly
Though this technique can cost more up front, it will actually end up saving you money in the long run. These sustainable features include solar panels, tinted windows, energy efficient appliances, and other green improvements. These few change can help you to lower electric and other utility costs, as well as preventing future damage and updating the entire building’s appearance. In fact, environmentally friendly updates can make open rental space look even more attractive to potential tenants. Additionally, you can often receive certain tax breaks from your state or federal government for updating your property.
Though boosting the value of your commercial property can feel overwhelming, it can be a super profitable and simple task. By increasing rent, decreasing costs, and making necessary repairs, you can easily add value to your property.