Running a commercial real estate business may be rewarding, but it isn’t always cheap. If your budget is stretched thin, you’ll need to look for innovative ways to reduce your operating expenses without sacrificing tenant comfort or safety.
Initially, you’ll need to spend a little money to perform preventive maintenance and replace outdated fixtures. However, this will cut costs in the long run, as older equipment and poorly maintained buildings are less efficient. Here are five ways to save money and improve living conditions for your tenants.
1. Reduce Your Water Bill
One of the biggest real estate operating expenses is water. You can reduce usage in your commercial building by installing more efficient fixtures. For example, swapping out traditional toilets built before 1982 with ultra-high-efficiency models that use only 1.6 gallons per flush saves thousands of gallons of water per person yearly.
Install low-flow sinks and tamper-proof, low-flow showerheads — if your building includes showers — to reduce the water bill even more. Additionally, if the property has sprinklers or hoses for landscaping purposes, buy low-flow versions to dramatically cut down your water usage.
Rather than waiting for something to break or become less efficient, take the time to do preventive maintenance.
- Ensure the building has thick insulation in the walls and roof. Add weatherstripping around windows and doors to keep a steady indoor temperature.
- Inspect fire alarms, smoke detectors and carbon monoxide detectors to ensure they’re in working order. Replace the batteries before they expire.
- Look for leaks and water damage coming from ceilings and walls.
- Treat the building for mice and insects.
- Cut any overhanging branches or leaning trees.
- Replace nonslip treads on the stairs and porch.
- Clean out any debris from the gutters.
If you aren’t already using lease management software, you should start. Commercial real estate owners use it to manage their properties because it stores lease information, including expiration dates, tenant contact info, contract agreements and payment due dates. It can automatically notify tenants of overdue bills or upcoming lease renewals.
Lease management software keeps track of your business’s financial info and ensures you get paid on time and receive the proper amount. It also lets you better organize your business-related finances, which can help you lower your expenses in the long run.
Embracing digital transformation in your building will help you in the short- and long-term. In the short-term, installing smart technology and digitizing non-digital equipment will improve efficiency and data collection and will provide the benefits of automated processes. In the long-term, you’ll see reduced energy and utility prices, you’ll be able to analyze data to make better decisions for the future, and you’ll be well-positioned to continue to digitize in the future.
A smart thermostat is a simple yet effective way to track your building’s energy usage. Which times of day or outdoor weather conditions prompt people to use the most electricity? A smart thermostat records a building’s energy consumption data, then uses it to suggest temperature control settings. It will also generate a report that helps you track overall power usage for given periods.
You can program it to run on a schedule like a regular thermostat. However, since it’s connected to the internet, you can also adjust the building’s heating and cooling remotely from your phone. A smart thermostat ensures the optimal temperature throughout the day, dramatically reducing your building’s energy usage and saving money.
Another technology to take advantage of is smart LED lights. LEDs lower energy costs compared to incandescent bulbs, but smart lights take it a step further. You can program them to switch on or off at different times, ensuring tenants don’t leave the lights on in common areas by accident.
You can control them remotely if needed. Because LED lights last so long, you’ll also save money by not having to change them as often.
Modern refrigerators, washers and dryers are much more efficient than older models. Though they can be expensive to replace, they’ll save money in the long run by reducing overall energy usage. Your tenants will also appreciate having more efficient appliances.
Additionally, modern appliances usually come with updated safety features to prevent fires, which can avert countless dollars worth of damage. Contact your local waste management division to find out how to properly dispose of old washing machines, dryers and refrigerators.
You should also inspect your building’s HVAC system. Is it still running effectively? If you can’t do this yourself, hire a technician to take a look and decide if the heating and cooling system needs an upgrade. Replacing or repairing it can save energy, maximize efficiency and lower your electricity bill. Plus, your tenants will be more comfortable.
These strategies probably won’t save much money when taken individually, but when you combine them, you’ll start noticing a difference. Take advantage of smart technology, real estate software, preventive maintenance and energy-efficient fixtures to upgrade your commercial building and cut down on operating costs.