In Guide
The Comprehensive Guide to Commercial Property Management in Canada
Whether you are a seasoned commercial property manager or an aspiring one, navigating the complex landscape of commercial real estate comes with some challenges.
If you want deep insights into launching your property management company in Canada, you can check out this comprehensive guide. In this article, we will look into how to become a commercial property manager and thrive in the real estate industry.
Duties and Responsibilities of a Commercial Property Manager
A Commercial Property Manager supports and assists in managing commercial real estate. The Property Manager is involved in all aspects of the day-to-day operations of the property, including:
- Accounting, Budgeting, and Reporting
- Market research and analysis
- Tenant relations
- Managing vendor relationships
- Maintenance and Repair
- Property marketing and scheduled showings to prospective tenants
- Late payments and other fees
- Security
- Rent collection
- Tenant screening
- Staffing and supervising employees
- Payment to vendors and owners
- Managing tenant occupancy and tenant eviction
- Janitorial services
- Lease negotiation and lease creation
- Property inspection (routine inspection, move in and move out inspection)
- Landscaping
- Responding to emergencies
- Snow removal, etc.
The following attributes are needed for success:
- exceptional communication and organizational skills
- detail-oriented and accurate, especially with numbers
- customer service experience
- ability to work under pressure
- self-motivated and self-directed
- ability to assert oneself
- exemplary time management skills
- ability to work with staff in solving problems
- ability to take direction and function as part of a team
Check out this guide on how to become a property manager.
Key Performance Indicators (KPI) to Set as a Commercial Property Manager
Key Performance Indicators (KPIs) are essential metrics to assess the performance and health of a commercial property as well as the effectiveness of the management strategies. We’ll explore the critical indicators that will help property managers to stand out to investors.
Rental Rates
Regularly compare your average per-square-foot rental rate with the local area’s current market rates. Informed decisions can be made to increase profits and retain high occupancy rates. The rental rate has a relationship with tenant renewal rate.
Tenant Satisfaction Rating & Tenant Renewal Rates
Building positive relationships with tenants fosters loyalty and can lead to higher tenant retention rates. Tenant satisfaction plays a huge role in increasing tenant renewal rates.
Tenant retention decreases marketing expenses and increases occupancy rates. Monitoring these factors can lead to a profitable commercial real estate venture.
Tenant Acquisition Costs
Commercial property marketing can be minimized, and the operations can be less challenging with a marketing team and specialized property management software. Specialized software like MIProperty Portal (MIPP) can post vacant properties for you on multiple online platforms with just a few clicks. Moreover, you can use the free online rental posting website of MIPP.
Vacancy and Occupancy Rates
A property incurs costs even if the property is vacant and no lease agreements are being made with tenants. Rental rates, tenant satisfaction, tenant acquisition and retention strategies affect occupancy rates. You can increase your rental rate if the occupancy rate is greater than the market average.
Net Operating Income Rate
Net Operating Income Rate is a financial KPI that measures a property’s financial health. This KPI allows you to observe your budgeted targets for revenue and profit growth.
If there are significant differences between your monthly budgets and monthly goals, rent arrears, maintenance costs, tenant acquisition costs, or rent that are not adjusted with inflation might be your problem.
Average Lease Time
The average lease time is usually higher for commercial properties, especially for newbie lessees, as you need to connect and explain the commercial real estate terms until they sign.
Observe and find the patterns and pain points of potential tenants so that it becomes easier and less time-consuming to attract the perfect tenant until they sign the lease, decreasing the average lease time overall.
Repair and Maintenance Costs
Repair and maintenance expenses play a huge role as a KPI in monitoring the property management budget. You can use specialized property management software to make proactive and scheduled maintenance tasks, rather than waiting for something to happen.
Figure out which component of the property needs frequent repairs and negotiate these recurring tasks with vendors to provide lower bids.
Response Time for Maintenance Requests
Keep your tenants happier by quickly responding to commercial property maintenance requests. Satisfied tenants mean higher renewal rates.
Thus, keep an open channel of communication with the tenants and a list of vendors at your disposal to receive a maintenance request and respond immediately. This not only improves the relationship but also increases your reputation.
Average Arrears
With the increased expenditures and an economic downturn, many businesses have to go into arrears. The average arrear KPI assists commercial property managers in understanding whether their strategies to help the tenant honor their lease, rental relief, or rent negotiations are working.
Commercial Property Management Fees in Canada
The fees of managing a commercial property range from 4 to 12 % of the total tenant rent for a commercial property. Factors such as the property location, size or condition or the average property management rates for that location, number and type of tenants, or the required additional services can change the fees.
Provincial Variations in Commercial Property Regulations
Understanding lease agreements and complying with local regulations are important aspects of commercial property management.
Ontario Commercial Property Regulations
In Ontario, property owners must comply with the Commercial Tenancies Act. You should also be familiar with the Environmental Protection Act, Real Estate and Business Brokers Act, the Planning Act, and the Building Code Act, including other relevant provincial and federal laws to ensure compliance and seamless property management.
You can learn more about renting commercial property in Ontario by clicking here.
British Columbia (BC) Commercial Property Regulations
The British Columbia Commercial Tenancy Act outlines the rights and responsibilities of commercial landlords and tenants. You should also be familiar with the lease agreements, building codes, zoning laws and environmental regulations of British Columbia.
Landlords can serve different types of notice, depending on the reason for termination. Some common types of notice include:
Alberta Commercial Property Regulations
Understanding the Commercial Tenancies Protection Act is critical for commercial property managers in Alberta. You must know about lease agreements in detail and make good contracts before a prospective tenant signs your lease. Compliance with these regulations ensures a transparent and legally sound property management process. Review lease terms regularly, communicate effectively with tenants, and stay informed of legal requirements to avoid potential pitfalls.
Challenges and Solutions as a Commercial Property Manager
Economic Downturns and Risk Management
Economic downturns can significantly impact the commercial property market, which increases vacancies and financial uncertainties and reduces rental rates.
Addressing such challenges requires a proactive approach to risk management. Brainstorming or communicating with other experts in the industry can help you create strategies for mitigating financial risks, handling vacancies, and optimizing property portfolios to tolerate market fluctuations.
Regulatory Compliance and Ethical Practices
To stand out as a professional property manager, you must maintain ethical standards and comply with regulations. Understanding the ethical considerations in property management, staying informed about regulatory changes, and maintaining transparency build a reputation for integrity and professionalism.
Commercial Property Management Certifications and Training in Canada
Advance your commercial property manager career with these certifications for commercial property management.
Property Administrator Certificate (PAC)
The Building Owners and Managers Institute (BOMI) offers the Property Administrator Certificate (PAC) program, perfect if you are new to commercial real estate or looking to enhance your skills. This comprehensive course serves as an entry point for those starting their journey and opens doors to further BOMI qualifications. Through PAC, aspiring property managers gain the expertise to oversee the operation and maintenance of building systems, ensuring optimal efficiency and cost-effectiveness.
Certified Manager of Commercial Properties (CMCP)
Elevate your career in property management with the Certified Manager of Commercial Properties (CMCP) qualification. Designed for early-career professionals, this program, co-offered by BOMI and the Building Owners and Managers Association (BOMA), is your gateway to industry validation and advancement. The certification issued by the Commercial Real Estate Certification Institute requires:
- A four-year degree plus one year of property management experience or
- A two-year degree plus two years of property management experience or
- No degree but four years of property management experience
Additionally, candidates must complete 30 hours of verifiable education in commercial property management before sitting for the exam.
Accredited Commercial Manager (ACoM)
The Accredited Commercial Manager (ACoM) qualification is offered by Institute of Real Estate Management (IREM). This program, equivalent to the ARM certificate, equips early-career property managers with fundamental knowledge tailored for commercial properties.
Delivered through the ACoM track, the curriculum covers essential topics such as budgeting, forecasting, and financial analysis in a commercial context. Upon completion, candidates tackle a rigorous 100-question exam.
Certified Property Manager (CPM)
With the popular Certified Property Manager (CPM) qualification from the Institute of Real Estate Management (IREM), you can demonstrate your prowess in maximizing property value across diverse asset classes.
Comprising eight comprehensive courses, this program delves into core competencies essential for effective property management and real estate valuation. From ethics and budgeting to maintenance management and investment valuation, the CPM curriculum prepares professionals to excel in the real estate management industry.
Leveraging Technology in Commercial Property Management
Even the most skilled and seasoned property manager can enhance their performance by embracing technology, specifically designed to cater to the property management industry.
Modern cloud-based software as a service (SaaS) systems enable property managers to increase their efficiency by automating recurring tasks, simplifying processes, and providing real-time access to various types of data.
MIPorperty Portal (MIPP) is an all-in-one property management software solution for commercial property managers, real estate investors and landlords in Canada. MIPP comes with numerous features:
- Tenant Screening
- Lead Management
- Commercial Lease Management
- Accounting & Reporting
- Tenant Background Check and Credit Check
- Online Rent Collection
- Vendor and supplier management, invoicing, and payment processing.
- Property Inspection
- Automated Forms
- Storage and management of communications.
- Automated Lease Creation
- Assistance with compliance requirements
- Maintenance Tracking and many more…
Why should you choose MIPP? MIPP can take your commercia. property management business to the next level. It will automate a large part of your day-to-day operations while you focus on and make the important decisions.
Get a free demo, or contact us to take your property management game to the next level.
The software is available on the App Store or Google Play so that you can take your property management business on the go.
Conclusion
In conclusion, commercial property management in Canada requires a proactive approach. A commercial property manager needs to stay informed, adapt to industry trends, provide open communication methods to tenants, and implement best practices to tackle challenges successfully. By understanding the unique aspects of the Canadian market and legal frameworks and embracing technology, you can position yourself as a proficient and successful commercial property manager.
Frequently Asked Questions (FAQs) about Commercial Property Management in Canada
In Canada, individuals can start by pursuing relevant education and certifications in real estate or property management. Gaining practical experience through internships or entry-level positions is also beneficial. Networking and staying updated on market trends can further enhance career prospects.
The NOC Code for property managers is 1224.0. The title is Property Administrator, and examples are Accommodation Officer, Housing Project Manager, Apartment Rental Agent, Property Rentals Manager, Property Administrator, etc.
Yes, there are. Consult with a tax professional to understand tax implications, deductions, and compliance requirements for commercial property ownership.
Attend industry events, subscribe to reputable publications, and join professional networks to stay informed about emerging trends and opportunities.
Technology can enhance property management efficiency through various tools and innovations such as property management software, IoT (Internet of Things) devices for building automation, etc.
Yes, there are specific regulations for property management that vary by province in Canada. These regulations cover areas such as tenant rights, landlord responsibilities, lease agreements, and property maintenance standards.
Property managers can enhance tenant satisfaction by providing responsive and proactive customer service, addressing maintenance issues promptly, fostering open communication channels, and implementing amenities and services that improve the overall tenant experience.
