Every lease lifecycle is finite and can be followed by costly vacancies unless you manage your leases effectively while they're still valid.
Leasing management involves a range of tasks associated with the daily management of your property leases. It ensures you live up to the conditions of your lease and includes every aspect of ensuring your tenants have a positive experience.
Read on to discover a few of the intricacies involved in effective lease management.
Lease Administration Tasks
A lease is a legally binding agreement between a landlord and tenant that defines their expectations. It outlines the mutual obligations and rights of both parties.
It's important to review all your lease documents regularly to ensure they're fulfilling this role.
Lease accounting helps ensure your investment business stays compliant with the relevant FASB ASC 842, IFRS 16, and GASB 87 accounting standards.
Common area maintenance is always one of the most prominent parts of any lease agreement. Maintenance ensures your property retains its value and helps keep your tenants satisfied and in place.
When leases reach their expiration date, landlords must review and consider their options regarding lease modifications and renewals in line with the latest rental laws and regulations.
The Importance of Lease Administration
Effective lease management is vital for succeeding in real estate investing. Taking care of all the tasks involved helps you maximize the profits from your rental portfolio in several ways, such as:
Lease Negotiation
Negotiating a lease that suits you and your tenants is the secret to long and positive associations. Every lease must work effectively in both the short and long term.
Essential aspects to negotiate include co-tenancy clauses, lease incentives, and common area maintenance responsibilities.
Lease Reviews
Regular review of your lease documents, invoices, and receipts is vital for forecasting and budgeting. It helps property investors consider whether lease renewal or termination is the better option.
Common Area Maintenance Administration
Keeping track of invoices and payments is a major task for lease managers involved in common area maintenance. These documents are important for forecasting and managing budgets going forward.
Goal-Setting
Organizational growth goals and real estate strategy often go hand in hand. Financial considerations like CAM costs, base and percentage rent, and building maintenance costs can significantly impact the performance of an investor's portfolio.
Lease Administration vs. Property Management
There is a lot of crossover between leasing administration and property management.
The major difference is that property management involves many more hands-on tasks, like collecting rent and screening tenants. Leasing management is more focused on collecting and analyzing data.
Most property managers can assist you with leasing management in addition to all their other tasks.
Leave Leasing Management to the Experts
Leasing management involves numerous important and ongoing tasks to ensure the health of your asset portfolio. PMI Great Lakes can help you accomplish them all easily and effectively.
Our team has years of experience assisting real estate investors with their property management needs. Get in touch to enjoy expert lease management and a thriving, profitable portfolio.
