To maximize tax and cost savings, it is important to properly manage every budget category. A major part of commercial real estate management is ensuring that the revenue projections are accurate, and one way to do that is by having a specific budget for the property. The budget should be itemized to reflect the different cost areas so that any deviations can be amended quickly.
Budgets that are too generic can land the owners, boards, and developers in trouble, both during tax season and when it comes time to sell or lease the property. A generic budget that only lists overall costs and is not itemized will not be sufficient for most purposes. Both state and federal tax authorities require commercial properties to be specific on their tax returns about the type of expenses incurred by the property. Many buyers of a commercial property will insist on knowing the detailed budget so that they can project the value of the property’s revenue and investment potential.
Many external factors affect a property’s budget, such as local regulations, reserve requirements, even the property’s age! We can help our clients develop a budget that takes into account factors that include property access and use, necessity of adequate reserves, and the potential for repairs. All of these items can be estimated using our experience in the commercial real estate business. We have worked with a wide range of properties and can help you create a budget that protects you from factors out of your control.
We give FREE budget evaluations to new and prospective clients. For an example of our expertise at work, we can offer you a detailed budget on your property without charge to show you our sincere desire to work with you. You may find that you have overlooked some budget items, or underestimated some area of cost that could be a problem in the future.
We go over every line of a budget, even drafting multiple budgets to prepare for different eventualities. Just as in any business, there has to be contingency plans if cost conditions change or other economic factors emerge. We can give you several budget options that may be used depending on outside factors, tenant occupancy or changes in utilities, taxes, and operating costs.
Please contact us at (888) 611-5598 to schedule a free budget evaluation for your commercial property.