Commercial property is one of the best investments to make in the real estate industry. However, it comes with many responsibilities, like finding the best maintenance vendors or handling tenant needs, and you need to keep a close eye on operations to ensure that everything on site runs smoothly and efficiently.
Even if you aim to make profits and expand your business, you may not quickly do so if you fail to take various measures to save money. Fortunately, there are ways to cut operating costs that can also increase your property value.
As you strive to save money, it’s important to consider tenants' comfort and satisfaction and ensure this is not compromised. All you need is to minimize costs while also maintaining a favorable environment for the tenants. Here is what to do to save on costs.
As you go about installing various features on your commercial property for effective management of operations, you need to focus on installing sustainable features that will help you save money on utility expenses in the long run.
This is one area where you can incur many expenses, especially if your tenants do not adequately manage such features. However, it can make even more of a difference in shared areas. For significant results, install LED lights and window films to minimize energy consumption. Conserve water by installing low flow plumbing fixtures and smart irrigation systems. Not only will you lower your utility costs, but you will experience indirect benefits like greater tenant retention and higher property values.
As a commercial property owner, energy consumption is one of your largest operating expenses, making it a key component to evaluate when trying to reduce costs. Energy costs will continue to increase if you fail to implement stringent measures to minimize usage. Fortunately, technology continues to make energy management easier. You can now install more energy-efficient components on your property.
Modern, more energy-efficient HVAC systems upgrades can help you save half of the money you spend on energy bills each month. Not only do you save by cutting energy consumption, but you also increase the value of your property when you install quality and modern fixtures. With new smart technology, you can even control the devices' operation and ensure that you minimize the time usage of various devices or appliances. Implementing such changes may feel like a financial burden, but the costs will be easily recouped from lower energy bills. Alternatively, performing regular maintenance on your existing HVAC system is one low cost way to ensure efficiency and reduce energy costs.
Another way to reduce your energy expense is to install solar. This option may be more affordable than previously thought with the cost of commercial solar installations having decreased 10% per year since 2001. The use of solar energy has shown to reduce energy bills by as much as 20-40%. Solar also supports tenant retention efforts and LEED certified buildings have been shown to produce higher rents and/or lower vacancy rates. By investing in solar, you’ll enjoy long-term low energy costs, thereby saving money in the long run.
When it comes to paying taxes, many businesses experience losses, especially when they fail to prepare earlier. That's why it's crucial to seek professional help on tax requirements. The provision codes can be very complex, and you may not know the nitty-gritty when it comes to commercial property tax.
You may also enjoy more opportunities from the state laws that can help you reduce tax burdens. Luckily, there are various elements that you're exempt from paying taxes. So, you can maximize this opportunity to save as much money. Below are some of the components that exempt you from tax payment:
To avoid assumption and maximize every tax benefit, ensure you consult a tax professional to help you get an in-depth understanding of tax exemptions. When you seek professional help, you'll be able to identify more applicable cases.
Tenant billing through submetering is another strategy that helps you recoup utility expenses while promoting conservation efforts. Commercial property managers are re-evaluating their approach to tenant utility billing and as a result, there has been an increase in billing based on submetered consumption rather than through CAM charges. Lumping utilities into CAM charges is typically an ineffective way of recouping utility-related expenses. These flat fees often don’t cover the entire utility expense billed to ownership. Billing based on submetered consumption is a more fair allocation that also ensures optimal recovery on utility expenses.
Accurate and consistent tenant billing through submetering will help ensure you are maximizing recovery on utility expenses. When submeters are used, tenants are more likely to conserve energy and water use; therefore, saving you and the tenant. Submeters can also assist in determining high energy and/or water users and identify if there are inefficiencies within specific spaces that need to be addressed.
The best way to ensure that you save money on your commercial property is by keeping a close eye on all operations. With so many different moving parts, this can be difficult at times. That’s why we aim to take the added burden of utilities off your plate by managing them for you. As The Utility Experts, we can provide help with any number of utility billing services, from expense management to tenant billing, and everything in between.
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