When It’s Time to Switch Property Managers
By nature, commercial property relationships benefit from consistency and longevity to ensure system optimisation and a positive tenant experience. Yet as properties evolve or new priorities emerge, there may come a time when it’s more advantageous to change commercial property management companies.
While these transitions require thoughtful planning, the effort can pay dividends, improving performance, operations, and costs long term.
In this guide, we outline the key considerations for making an informed switch to a new property manager, from evaluating current gaps in your management plan to handover processes.
Identifying the Current Issues
First, you’ll want to go through the constructive (sometimes painful) process of fully critiquing your property’s current standing across key indicators. This will help you assess where the shortfalls are, and what your priorities are for a new commercial property management company.
Consider the following:
Occupancy Rates and Rental Income
Are vacancy levels higher than average market rates for comparable spaces? Has rental income plateaued while neighbouring properties secure increases? If possible, try to find and dig into granular data, such as looking at your specific property type within your city (or even suburb, if you can find the data).
Tenant Relationships
Do you receive more complaints than compliments? Are service requests cared for promptly or do they linger? Assess the responsiveness of your property management company.
Financial Tracking Systems
Are financial statements timely and well presented, or late and filled with errors? Are insightful operating budgets set at least yearly? Accounting precision is critical when it comes to assessing your property’s financial performance.
By itemising shortcomings, you gain clarity on your priorities for improvement that can be translated into a wish list for prospective companies.
Defining Your Ideal Property Management Experience
Now that you have a list of priorities, shift focus towards shaping what your ideal relationship with a property management firm looks like.
What would their ideal offerings be? Identify what must-haves and nice-to-haves are across:
Service Offerings
- Specialised leasing support
- Client access portals
- Proactive maintenance programs
- Tailored budgets and financial forecasting
- Expertise in specific niches or property types
- Proactive approach to optimising your investment
Market Knowledge
- Direct broker connections for filling vacancies
- Relationships with tradespeople
- Knowledge of Perth’s commercial property codes and regulations
- Experience with the Perth property market
Responsiveness
- Turnaround times on reporting or repairs
- Communication platforms
- Decision maker availability
- Proven positive tenant relationships
This exercise structures selection criteria for you to use when assessing alternative commercial property managers.
Evaluating New Commercial Property Management Providers
Armed with clarity on current gaps and your optimal scenario, the search for a new commercial property manager begins.
Here are some steps you can take to find the best commercial property manager for your needs:
- Background Review: Search online listings and local business directories for options managing comparable properties in your areas at a similar scale to yours.
- Information Gathering: Once prospects emerge, dig deeper through websites, client testimonials, and leadership biographies, focusing on competencies aligned with your needs.
- Initial Outreach: Contact 2-3 firms, explaining you’re exploring commercial property management transitions. Request details on service capabilities, pricing structures, and client results. Make sure you specify the requirements you have identified and assess how well the new company can meet these requirements.
- Follow-up Q&A: Meet to ask outstanding questions. Seek client referrals for candid feedback. Require responses to your wish list.
Structuring the Handover
While it can be exciting to switch commercial property management companies and start seeing the improvements, you shouldn’t let your enthusiasm rush the handover process.
Expect a Multi-Month Transition Period
Given the intricate operational systems and relationships in commercial property management, don’t expect an immediate switch overnight. Plan for an extended 2–3-month transition phase involving parallel tracking between your old and new commercial property managers. For example, have both firms simultaneously record income during the handoff ramp-up. This prevents data gaps.
Create a Meticulous Handover Plan
Coordinate the key milestones to ensure that everyone is on the same page:
- Tenant Communications: Notify all tenants in writing of the exact date the new property management company begins. Introduce their new points of contact and key personnel.
- Data Migration: The previous property management provider sends all documentation like lease agreements, maintenance records, inspection reports, etc. to import into the new platform.
- Contractor/Vendor Notifications: Notify vendors, maintenance companies and regular contractors that the new firm will now coordinate and assign services. Share new points of contact.
- Banking Account Changes: Shift any security deposits or operating bank accounts over to your new property manager by the handover date.
- Final Financial Reconciliation: The previous agency provides the final income and expenses report. The new firm can compare for insights during the transition period with parallel tracking.
- Documentation Signoffs: This is the final legal transfer of management responsibilities, marked by signatures between property managers.
Set routine check-in calls/meetings with both old and new property management companies to discuss progress on handover plan items, addressing any hiccups in parallel systems tracking. Confirm all parties remain aligned on the timeline and their respective responsibilities for a smooth transition.
Over-Communicate with Stakeholders
Inform all vendors, contractors, and tenants of the pending switch in property management companies early and reinforce repeatedly. Send multiple written notices leading up to the handover date. After the switchover, follow up to reconfirm contacts and preferred communication protocols under the new agency.
With diligence and care taken in planning each transition milestone, a structured handoff allows the new property management relationship to stabilise quickly. This allows commercial property owners to realise the full benefits of an improved management approach over the long term.
Elevate Your Property Management Experience
Don’t ignore consistent underperformance from your current commercial property management provider. While transitioning companies creates some initial work, it also provides the perfect opportunity to step back, clarify your priorities, and improve long-term performance.
At Vast Commercial Property, we are your dedicated commercial property managers proudly led by business owners Eddie and Greg. As commercial property investors ourselves, we intimately understand the unique needs and concerns of commercial property investors. When you choose to partner with Vast, you deal directly with Eddie and Greg for a top-quality service. We build personal relationships focused on open communication and transparency. Our goal is to make property management effortless for investors.
When you’re aligned with your commercial property manager, any temporary hassles from changing providers will pay off many times over through superior long-term management that improves your investment outcomes.
Discover the Vast Commercial difference – contact us today to learn how our bespoke approach can unlock your commercial property’s potential.