Property Management eBook - Top Tips for Commercial Property Management

01

TOP 3
DO'S & DON'TS OF
PROPERTY
MANAGEMENT

Our mission is to let you live your legendary life with
PRIDE and PURPOSE.



We just help facilitate this by looking after the DAY-TO-DAY
MANAGEMENT and OPTIMISING PERFORMANCE of your
commercial investment property.



We treat your property with the same CARE & ATTENTION as
if it were our own property; because you are our investment.



Our commitment to you is to allow you the FREEDOM TO
FOCUS YOUR TIME on what you love doing most, with the
people that matter most to you while you build a better,
stronger, and more prosperous future than ever before.

PAUL
DUGAN

Director & Principal

SOPHIE

YEARS OF EXPERIENCE FRIPP

Combined experience of over 61 years in Property Head of Asset Management

SPECIALISATION JODIE

Property Management, Sales & Leasing of Commercial Property in South-East

Queensland.

BAILEYAt Dugan & Co Property, we help investors and business owners to build security,
wealth and prosperity through using commercial property as a vehicle and
accelerator of business growth and returns. Property Manager

DO's: 1

Look after the
Tenant & they will
look after you

THE TENANT IS THE "GOLDEN GOOSE", ENSURE THEY
CONTINUE TO LAY THE "GOLDEN EGGS"

PROACTIVE PROPERTY MANAGEMENT

Happy tenant's pay rent, pay the outgoings, stay in the property, renew leases, sign new leases and when they need more space, they come to the
property manager as ask them the owner to source a bigger building for them to move into.

TENANT IS HAPPY

The income and performance of your investment depends on this

5 MAJOR HANDS ON APPROACH

Builds tenant rapport, goes out on site as needed. You can't manage a

AREAS OF commercial property from behind a keyboard

PROACTIVE COMPLIANCE & LEGISLATION

Requires specialised knowledge and must be applicable to the location of
your property. Such as WH&S, certificate of classification, ACP, Asbestos etc.

PROPERTY ASSET PLANNING

MANAGEMENT Long-term strategic advice and connection with a leasing team
for feedback on current market dynamics

COMMERCIAL KNOWLEDGE

Thorough understanding of how to look after the tenant within the bounds of
the lease covenants and understanding of commercial buildings

DON'Ts: 1

RE-Active only
Property Management

UNHAPPY TENANTS, DON'T PAY THE RENT, DISPUTE
OUTGOINGS AND LEAVE THE PROPERTY

REACTIVE PROPERTY MANAGEMENT

Happy tenant's pay rent, pay the outgoings, stay in the property, renew leases, sign new leases and when they need more space, they come to the
property manager as ask them the owner to source a bigger building for them to move into.

TENANT IS UNHAPPY

They pay the rent late, dispute outgoings and leave the property

1. RE-ACTIVE PROPERTY MANGER HAS NEVER
MET THE TENANT

The tenant doesn't know who their property manager is

PROPERTY COMPLIANCE & LEGISLATION
MANAGEMENT
Not addressed and ticking time bomb or liability to the owner

MISSED RENT REVIEWS AND VACANCY

Rent reviews are not completed and last minute notice results in longer
vacancy period for the owner

LACK OF UNDERSTANDING OF COMMERCIAL
BUILDINGS

Neglect of the repairs, maintenance and capital expenditure

04

2. DO's:
Recover ALL
Outgoings

TYPICALLY THREE BASIC METHODS

FOR COMMERCIAL AND INDUSTRIAL

PROPERTIES


There are Pro's and Con's to each method

1.DIRECT RECOVERY
2.NET LEASE RECOVERY
3.GROSS LEASE RECOVERY

Direct
Recovery

RECOVERING THE COST AS THEY OCCUR
FROM THE TENANT

PRO'S

No annual budget and reconciliation

Tenants have a copy of the invoice they are paying

CON'S

Time delay between owner paying the outgoing and being reimbursed by
the tenant

Multiple bills may come at the same time and have cashflow implications for
both owners and tenants

Individual invoices can lead to more frequent disputes or payment delays

Budget

NET LEASE

PRO'S

Provides certainty of cashflow for tenant and owner

Simple to invoice with an outgoings charge to their monthly invoice

Ability to make adjustments if the owner incurs additional costs

CON'S

Needs a good budget and reconciliation process and timely attention and
preparation

Need to factor the impact on monthly net income for when larger invoices
come through i.e. land tax

Gross Lease

PRO'S

Simple invoice and no annual budget and reconciliation required

Outgoings increase inline with CPI or fixed amount

Potential income if there are outgoings reductions or savings

CON'S

The owner cannot recover outgoings above the agreed amount

Outgoings may escalate and there is no opportunity for the owner to adjust
or recover during the term

Gross figure can be harder to market depending on the leasing strategy

04

2. DON'TS
Not Recovering
Outgoings

...WHEN THINGS DON'T GO TO PLAN

Outgoings are not recovered under the terms of the lease
Common Outgoings includes: Rates (incl. Water &
Sewerage
charges), Building Insurance, Land Tax, Property Management Fees,
Body Corporate Fees, Repairs, cleaning, gardening, and
maintenance. Excluding capital items and development costs.
The landlord may pay some expenses directly i.e. commonly
insurance but this may be recoverable under the lease.

3. DO's: Regular inspections
& Entry Condition Reports

YOUR PROPERTY MANAGER IS YOUR EYES AND EARS

Ensure they complete routine inspections and an entry condition report is provided or completed for your
investment property. This is crucial to ensure that the property manager can maintain your asset in the best
condition and at the end of any tenancy, administer the make good clause applicable under the lease.

Key areas to consider in terms of
inspections and property reports

DO'S

Entry Condition Report completed
Regular inspections of the property, ideally every 6 months with a formal
property report.
A comprehensive make good clause. If not this should be reviewed when
renegotiating.
At the end of the tenancy the make good clause administered by the
property manager in accordance with the lease and current
leasing market
strategy.

The right property manager can give you peace of mind to be your eyes and ears and it doesn’t matter if
you are 10km away or 1,000km.

3. DON'TS: "KEYBOARD
WARRIOR"

DON'TS

Manage the property from the keyboard.
No entry report on record and disputes at the end of a tenancy which costs the
owner.
No regular inspections on site, tenants leave and poor maintenance of the
property.
Make good is not enforced or strategic leasing insight is not considered.

CASE STUDY

LOCATION

Geebung, Queensland

PROPERTY

Multi-tenant General Industry

PROPERTY SIZE AND
CONDITION

Large industrial asset with long term tenants

OUTCOME AFTER HANDOVER OF
NEW MANAGEMENT

Missed outgoings: $43,810.00 p.a. (Land Tax, Ins & Mng Fees)
Rent review completed with an additional $14,592 rent p.a.

REIQ AWARDS
FOR EXCELLENCE

Commercial Agency of the Year
Finalist 2021

Dugan & Co

Commercial Salesperson of the Year
Finalist 2021

Paul Dugan

REIQ

Awards Night 23 Oct 2021

CONTACT DETAILS

DUGAN & CO
PROPERTY

Asset Management

PHONE THE TEAM

07 3216 1564

EMAIL

[email protected]

OFFICE

1/88 Commercial Road
Newstead QLD 4006

DISCLAIMER

Important: The Information contained within this document has been obtained from sources believed reliable. Notwithstanding, Dugan & Co has not verified the information contained herein and makes
no guarantee, warranty or representation (express or implied) about the information contained herein. Subject to any unexcludable legislative provisions and to the full extent permitted by law Dugan &
Co accepts no responsibility or liability (including in negligence) for the information contained herein.

Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful,
independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Intending purchasers, lessors or interested parties should satisfy themselves as
to the truth or accuracy of all information given by undertaking their own inspections, searches, surveys of building and floor areas, enquiries (including as to zoning, town planning and use), obtaining
their own advice or through direct correspondence with the vendor.

It is strongly recommended that you seek independent advice from your accountant, financial advisor and/or lawyer and satisfy yourself as to the correctness or accuracy of those statements by such
independent investigation as you or your advisers see fit before entering into any agreement of any nature with any party. Where drawings and plans have been provided, they have been obtained from
the vendor. Unless otherwise stated the drawings and plans are not to scale and are indicative only.

We have not independently verified the correctness or accuracy of the drawings, plans or other information in this document which has been provided to us by the vendor or other third parties. If a
projection has been made in respect of net income or rental yield, such a projection is an estimate which is dependent on several variables. The estimate represents only one possible result, depending
on the assumptions made as to the way the rent review negotiations are undertaken and are subject to the variances of the market.

Potential investors should satisfy themselves as to the status of any rent review negotiations and make their own judgment as to the likely outcome. Neither Dugan & Co Pty Ltd nor its servants, agents
or any person in its employ has authority to make or give any representation or warranty or to state any matters of fact or opinion in relation to the property other than those which are expressly
contained within this document. Unless indicated otherwise, the contents of this document are protected by copyright and Dugan & Co reserves all its rights in that regard.