6 Tips to Cut Operational Costs For Commercial Investment Properties

Mar 10, 2016

Commercial investment properties can be lucrative investments, bringing in a stable cash flow while adding EQUITY to your investment property.

Savvy owners are always looking for ways to increase a property’s NOI, and often, that can involve expensive renovations or costly building additions. However, did you know that there are several small changes you can make to help your property run more efficiently while decreasing your expenses by as much as 20%?

These changes work because they are small and yet easy to implement, and yet do not detract from the desirability of your property. Plus, when energy costs make up 30% of a building’s costs, even a 1% difference can increase your bottom line.

  1. Lower Refrigeration Units to the Correct Temperature

If your commercial income property includes shared amenities such as cafes, restaurants, or other food preparation areas, then following this tip alone could help you save thousands of dollars a year.

It’s common practice for refrigerators to be kept lower than the recommended temperature of 37-40 degrees F, with freezers from 0-5 degrees. Whether it’s a case of temps slowly creeping down over time, or whether or not the temperature was sent once and forgotten about, setting refrigeration units to the proper temperature is an easy to fix.

  1. Close Curtains to Prevent Heat Loss

Although the amount of heat loss or gain depends on the type of fabric used, and the color of the curtains, overall the simple act of closing the curtains during the summer to prevent heat from entering the room can reduce heat gain by 33%. In the winter, closed curtains can prevent up to 10% of heat loss from the room.

  1. Check HVAC Systems Regularly

HVAC systems are costly to replace, and though the cost of replacing one can be depreciated, the expense can leave a healthy dent in your cash flow for several months.

In order to extend the life of your HVAC system and help it run more efficiently, here are some tips to follow:

  • Install a programmable thermostat
  • Setting the thermostat to 68 degrees during the day and 70 degrees at night saves you 3% on heating costs for every degree under 70.
  • Clean heating ducts
  • Clean air filters every month
  • Repair leaks in piping, air ducts, coils, fittings and at the unit(s).
  • Replace defective equipment insulation, ducting and piping.
  • Install/upgrade HVAC controls to include new energy management systems technologies.
  1. Upgrade Lighting

Lighting costs make up nearly 25% of energy use in a typical office building. Although the cost is usually carried by the tenant, reducing the cost not only decreases occupancy costs for tenants, it also increases tenant satisfaction.

  1. Put Office Equipment Not In Use to Sleep

Activate sleep settings on all computers, printers, copiers, scanners, fax machines, and other devices.

  1. Create an Operation and Maintenance Schedule

Lowering operating costs means that your property manager will need to schedule a regular time to perform maintenance and review operation. These scheduled times are also an excellent opportunity to evaluate the operation of the building to ensure it is running efficiently, and to track any improvements.

Having a plan to monitor key areas and record savings is perhaps the most important way to increase your property’s NOI. Plus, by implementing these low cost strategies you reduce your investments’ energy footprint and demonstrate your commitment to the overall health of the environment.

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