5 Reasons to Remodel Your Property While It’s Vacant
Remodeling a residential building is easy. When a tenant moves out, you can go in and remodel anything you want. You’re not under pressure to complete the job unless you need to rent the unit fast. Even so, most jobs can be completed fairly quickly. Remodeling commercial real estate is slightly different game.
Regardless of why you want to remodel a commercial property, the best time to remodel a commercial property is during a major vacancy.
1. Remodeling during a vacancy can make you more profitable
If your first thought is to fill a vacancy as fast as possible, you may want to reconsider.
For example, after a major tenant vacated, the owner of a five-building medical complex decided to move forward with a $1.1 million remodel. He could have lowered the rent to get a tenant in quickly, but he had his eyes on long-term gains. The building owner made sustainable improvements to the property along with major design changes and transformed the aesthetics of the entire building. Everyone was impressed.
The results? Tenants rushed to get into available spaces knowing the rents would go up. Of course, rents did rise by 20%. Additionally, the entire third floor, which had been vacant for a year, was quickly rented to full capacity.
Remodeling during a vacancy is a long-term strategy for increasing profits, filling vacancies faster, and retaining happy tenants longer.
2. The risk of a construction injury is far less during a vacancy
Construction is one of the world’s most dangerous jobs and accidents are unfortunately common. More than 150,000 construction accidents occur each year in the United States, many of which are fatal. Even worse, many accidents happen to bystanders. For instance, in 2016, a crane collapsed in Manhattan, killing a pedestrian walking down the street.
All construction sites are hazards to some degree. Complete safety is impossible. Between machinery, trip and fall hazards, and falling objects, construction is always safer when the surrounding area is clear of people.
When you remodel a commercial property during a vacancy, there’s less risk to people’s safety. Without a tenant in a building, there won’t be any workers or clients/customers. If the building is shared, there will at least be fewer people around to potentially get hurt.
3. Remodeling projects are more efficient during a vacancy
During a vacancy, your remodeling project will get done faster. Construction crews will have fewer people to interrupt their flow and they can pile the furniture out of the way.
When a building is completely vacant, you don’t need to worry about the foot traffic backups that come from closing an elevator or staircase.
4. Remodeling during a vacancy can stop the spread of COVID-19
Construction crews struggle to meet social distancing guidelines on the job, and some say it’s nearly impossible. If construction crews can’t easily stay 6 feet apart while working, that’s going to potentially expose tenants and their clients/customers. When a building is vacant, however, the construction crews aren’t going to spread the virus to tenants and their customers.
Buildings with vacancies and shared spaces like lobbies and hallways need to be a little more cautious. Realtor.com recommends talking to contractors ahead of time to find out how they plan to keep everyone safe. It’s also advised to find out if the company has a written policy for prevention methods and how policies are enforced.
For more information on what a job site should look like while workers take precautions, here’s a detailed description. For instance, workers should have access to proper hand washing stations, hand sanitizer, sanitizing wipes, surface disinfectants, and trash should be emptied regularly.
5. You may not get another chance to remodel
If you rent your vacancies fast, you may lose the chance to remodel. Technically, you could work around your new tenants, but you don’t want to inconvenience tenants who just moved in. Also, there could be a portion of the remodeling job that requires shutting down all businesses temporarily. That’s not going to be received well by new tenants. They’ll wonder why you didn’t remodel before renting to them.
Should you remodel during a vacancy? Absolutely
The benefits are clear: Remodeling during a vacancy is a good long-term strategy for increasing your profits. Remodeling will increase the value of your property, which allows you to charge more or rent. With an upscale remodeling job, you’ll fill vacancies faster, retain tenants longer, and you might even end up with a waiting list.