Commercial Real Estate Myths EXPOSED #4: I Don't Want Real Estate - It's Too Much Work!

  📍 Too much time to manage? This is commercial, not residential.

Hey everybody. Joseph Gozlan with Eureka Business Group, Your Retail Navigator for the Dallas Fort Worth market. And today we’re gonna talk about a myth that I hear quite often.

It’s oh, I don’t want real estate. Real estate is too much management, it’s too much time. And if you are thinking that way, I’m gonna tell you one thing. This is not residential. We’re talking about commercial real estate. The world of commercial real estate is so different than what you think you know about residential, that it’s not even nearly as much management as you think. So let’s talk about commercial real estate for a second. There’s two types of commercial real estate that you’re gonna deal with. The one that is absolute triple net zero landlord responsibility.

This is literally don’t call me unless the building is on fire. And that is. One type of real estate that you can purchase, you can invest in, and this is mailbox money. This is the definition of mailbox money. You don’t deal with anything. The tenant is handling all the maintenance. The tenant is paying their own insurance.

The tenant is actually directly paying the taxes with the county. They do everything. All you do is collect the check. The other type of commercial real estate is your usual triple net. That may be a shopping center. Maybe it’s only two or one or two tenants, but it means that you still have some management for that. We have professional property management companies, but even if you choose. To manage a small shopping center on your own, let’s say five, six tenants, you’re not dealing with tenants in toilets.

You’re not dealing with 2:00 AM phone calls. You’re not dealing with. My outlet doesn’t work. because most commercial real estate contract define that. Everything that happens inside the space is the business owner responsibility and the landlord is only gonna be responsible for things that are outside of the suite.

For example, if a toilet gets clogged, not your problem, the tenant needs to handle that. If the faucet is dripping, the tenant has to take care of it. Lights go out. Outlets not working, anything like that. It’s the responsibility of the tenant. Let’s take it a step further.

Even if the AC breaks in the middle of the summer, the tenant is responsible to call the AC technician to come and fix it. This is how simple managing a small shopping center is even on your own. So what do you have to worry about? You have to worry about the outside. Maybe if the exterior lights go out, maybe there’s a pothole in the parking lot.

In those cases, you’ll have to spend some time fixing it, but handling these things is so rare. You maybe have one or two of those a year, so it’s gonna be manageable. It’s gonna be very easy. Most of small retail strip owners that self-manage maybe put one or two hours a week, maybe in one or two hours every other week.

That’s about it. So compared to dealing with a residential property where you have to deal with my toilet is clogged, my dishwasher stopped working. The garbage disposal is not working, and so on. You don’t have any of that trouble. You only handle the outside. Last thing we’re gonna talk about is professional management, unlike residential, where they’re gonna call you for a $100 or $200 little items. Professional commercial property management companies do more than just handle service requests. They do accounting for the property. They help you with CAM reconciliation, which is helping you figure out what the new triple net every year.

They can also offer services like tax protests, like CPA, bookkeeping. They also handle the landscaping. They handle cleaning up the properties. They handle a lot of different things that you don’t have to deal with. And it’s a lot easier to handle a commercial property management because they don’t have to handle all the things we talked about with tenants and toilets.

It comes down to the fact that the tenants in those commercial properties are business owners and not just individuals. And as a business owner, I need to make sure that my business is profitable. I need to make sure that my business looks good and inviting to customers, and I need to make sure that I pay rent on time because if I don’t pay rent, I don’t have a business. So wrapping all those things together, the myth about real estate being time consuming comes from the world of residential tenants, comes from the world of single family, multifamily, handling people where they live, and not commercial real estate where you deal with business owners.

So that myth is busted too. If you wanna see other videos that we created in the Myth-Busting series, we’re gonna leave a link below in the description.

And if you wanna download the entire PDF with all seven myth, you can just download it at the link in the description as well.

I’m Joseph Gozlan with Eureka Business Group, Your Retail Navigator for the Dallas Fort Worth. If you’re interested in commercial real estate investing and wanna learn more, give me a call, shoot us a message, send us a DM. We respond in all channels, and I’ll be happy to help.