Commercial Vs. Multi-Family Residential Property Management


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If you’re only getting started with a career in property management, you might be wondering whether you should go for residential or commercial property management. To be able to make an informed decision, you’ll need to grasp the key differences between commercial and residential property management. Here is our take on the comparison:


Rental Payments

In the case of residential properties, tenants don’t just pay rent, but also cover the utility payments such as water and electricity. If you choose to manage this property type, expect to receive around 8 to 12 percent of your monthly rental revenue from the property.


Commercial real estate also involves rental payments, but these payments are inclusive of the property maintenance fees, insurance, and property taxes. The proportion of the base rental fee you collect as a commercial property owner is 4 to 12 percent.


Location of Property Manager

When managing residential real estate, you’ll certainly need to stay responsive to tenants’ requests, but it’s not necessary to be on-site for maintenance jobs. However, this may not be true for commercial property managers. For example, some state laws in the US require property managers or a large shopping center or office building to be located on-site.


Legal Aspects

Different types of real estate have different permits and policies they must adhere to. Among the various tenant/landlord laws you’ll need to navigate as a residential property manager or owner include The Building Act 2004, Housing Improvements Regulations 1947, Residential Tenancies Act 1986 (RTA), and Residential Tenancies Regulations 2019.


Since commercial tenants lease and occupy a property for a much longer duration than residential tenants, commercial property leases happen to be more detailed and complex. This means that the laws and legal implications of making changes to commercial properties are also complicated. The Property Law Act 2007 is a critical law to comply with. It lays out regulations for the relationship between property owners and the occupants.


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These were the key differences between commercial and multi-family residential property management. You should now be in a much better position to choose the right type of property. If you’re an investor, get in touch with Milbrook Properties Ltd and explore your options.