Seven Deadly Sins of Property Ownership
Disregarding building insurance risk could eventually make you beyond angry if disaster strikes. Have your carrier/broker and local fire department come out to walk the property and discuss potential hazards (I would be available as well). Having a fire or other issues that could have been avoided will leave you angry and potentially broke.
This can blind the owner whose interest in saving every penny while misunderstanding the cost of vacant space, implementing quality labor/materials, or using lease analysis tools. Greed can cloud the owner to come to a less informed decision on a potential tenants and lead to decreased rents, higher vacancies and lower property values.
Owners who are indifferent about what a tenant wants inside their space as well as building amenities may eventually be sorry. Don’t assume you know what your occupants want in their space experience or eventually you will be envious of other landlords who listen to those needs and end leasing to your “former” tenants.
Often times owners are unable to fund capital expenditures, tenant improvements, deal costs or emergencies because they did not maintain discipline in budgeting for future expenses while making large distributions to themselves and partners.
When a property is purchased, there should be a plan in place for the ownership entity to follow using financial modeling. Important factors like hold period, succession planning, return/cash flow goals, and ultimately a plan to dispose, all need to be considered. Owners unwilling to listen to others advice can become the victim of pride.
Poor or minimal maintenance of documents. It is critical to be very diligent on keeping good records and make available all leases, amendments, histories of maintenance, replacements, floor plans, surveys, title reports, soil tests, EPA reports, etc. If you are looking to sell you property and have very little of this information buyers tend to discount the asset.