The value of a commercial property is determined by two crucial factors, one, its historical data and second, its potential value to get in more revenue for you, drop your expenses and augment your overall equity and value of the asset
The point is, it is possible to raise the value of the bought property by implementing certain changes around it.
Here are 6 ways to enhance the value of commercial property
Better the property
Improve the value of your commercial appraisal by making cosmetic changes to it or substantial rehabilitation changes, and by amenities. Cosmetic applications include painting, new decor to common elements, new flooring, can enhance your property’s value. Substantial rehabilitation changes are bigger and involve transforming the structural facade or renovations to the common lobby of a large office building etc. Amenities can be anything from parking lots to child care. For example, if you do have a parking lot, improve on it by implementing security measures like alarm systems, gates, or security guards to attract new tenants. And if one doesn’t exist add one nearby your property for your tenants. Make your property more appealing and valuable: create a playground in a multifamily property or add free wireless internet for your retail tenants. Or you can include more extravagant amenities like a daycare center in your office building or an outdoor courtyard in a hotel property. Go eco-friendly. It is a high initial investment in the beginning, it is cost-effective later on. Solar panels, tinted windows, energy efficient appliances, and other green improvements. Not only will electric and other utility costs drop, but you will receive appreciative tax breaks from the state and federal government.
By bettering the property you increase its value for tenants and for your own portfolio. So when scouting for commercial properties, think about strategies you can employ to make the property more valuable. Know your property’s potential before you close the deal. The best deals are made when you buy a property, not when you sell it.
Raise the Rent
Another way to improve on the value of your commercial property is to increase the rent after checking on historical data of the property to find out if tenants are paying market rent or lower than the average rental rate. If lower than market rate, there is scope for increasing the rate of rent. This can be justified by the improvements made to the property.
Cut down spending
Evaluate the historical operating statements of the property to determine if there are areas where you can decrease the expenses. More energy-efficient light bulbs in the common areas will radically cut your monthly electrical bills. Where gas is concerned the gas company can individually meter the units which will enable the gas expense to be passed on to tenants, instead of you bearing this recurring expense.
Transform the value of the property by repurposing it
Sometimes if you seek a zonal variance to convert a commercial real estate for another purpose, it can drastically transform the value of the property. For instance, a run-down industrial area can be converted into a massive upmarket shopping mall - the value of the property increases with its lucrative potency.
Boosting the value of your commercial property may seem like an insurmountable task. But it can be super profitable. By increasing rent, decreasing costs, and making necessary repairs, you can easily add value to your property.
RD Clifford Associates for your commercial real estate appraisals
Since 1990, RD Clifford Associates has been a leader in commercial property valuation in New York, New Jersey, and Pennsylvania. They are experienced in valuing commercial properties of all sizes and for all purposes. You can rely upon their detailed reports to provide you with all relevant information and an accurate valuation.
