Choosing a Property Manager – Practical Tips For Real Estate Investors

Selecting a property management firm is one of the most important decisions a real estate investor can make. The following are critical factors we think you should look at when making your decision.

Customer Service

You really want to select a firm that will deliver great customer service – to you and tenants alike. If you experience any responsiveness issues when inquiring about their service, the odds are that you will experience the same on an ongoing basis if you select the firm. Ask pertinent questions such as:

  • Are they available after regular working hours?
  • How do they handle emergencies?
  • Who can you speak to if there are problems, and where are they located?
  • Do they offer any guarantees on their service?

Knowledge of Building Construction & Maintenance

Experience and knowledge of building construction and maintenance is key for your property management firm to have. We would expect a coffee company like Starbucks to have excellent knowledge about the coffee equipment in use at their stores. We should expect a property management company to have excellent knowledge about the building technology in use at their properties. Key questions are:

  • Do they have skills on staff to be able to diagnose building issues quickly & effectively?
  • Are formal and documented maintenance and capital upgrade plans created for each property?
  • Can they manage subtrade work over and above minor maintenance?

Tenant Screening Process

You will want to select a firm that takes tenant selection seriously and does more than just the standard background checks. Tenant selection requires time, solid inter-personal skills and good judgment. Ask questions such as:

  • How much time will they spend with a prospective tenant?
  • What kind of questions will be asked of the tenant?
  • Will references be checked even if a reference letter is provided?

Local Market Knowledge

The most important influence to real estate investment value is the local market influence – and local market knowledge is key. Your property manager should have excellent knowledge of the local real estate market. Ask pertinent questions such as:

· What local staff presence exists?

· How does the firm keep up with local market trends?

· Will you be dealing with any remotely located staff to get service?

· Will tenants or prospective tenants be dealing with local or remote staff?

Fee Structure

You will want to select a firm with reasonable fees and also a structure whereby fees on top of fees are avoided. For example, for a renovation you will want to avoid paying a % fee to the construction contractor, and then a % fee to the property manager on top of that. Ask pertinent questions such as:

· What fees are charged for renovation and construction projects?

· Do they use general contractors for renovation and construction? If so, what fees are charged?

· Do they have the capability to manage subtrades directly?

Information Systems

Technology helps businesses run. Your property management company should have a clear information systems management strategy and operational. As the owner of the property, in the end you are responsible for the information so you will want to make sure your property manager has a good handle on it. Ask pertinent questions such as:

· How is information maintained?

· Are IT industry best-practices followed?

· How is privacy legislation compliance achieved?

· Does a backup strategy exist?

· What is the company’s IT disaster recovery plan

Accounting

And finally, you will want your books in order. This will keep your tax accountant happy and your accounting fees low. Find out if the property management firm has a solid grounding in accounting practices. Key questions include:

· What financial and transaction records are kept?

· What is the accounting cycle for the property?

· Which reports will be provided?

· Is someone available to answer your accountant’s questions should any arise?

Understanding the above areas and getting to know a property management firm’s management approach to managing these key aspects of real estate management will lead you to making a well-informed decision.

Visit www.kazawest.com/articles to access related articles and illustrated versions where applicable.

Before You Choose a Property Manager, Know These Duties That He Should Fulfill

Opting for property management for your house is a definitely good idea but remember it can be one of the most terrible things if you're lacking the necessary information.

That being said, it is important for all to have the necessary information about management and the work of the property managers. This is an important part because it helps the property owners in deciding whether or not the manager they're hiring is well suited to meet all their requirements.

Here is some information for you –

Property Management –

The process of operation, control, and oversight of real estate in the broadest terms are called property management. Management here indicates a need to be cared of, monitored, and answerability is given the property's life and conditions. Including this, management of property also involves the management of personal property, equipment, tooling and other assets that are used in building, repairing, and maintain the end items deliverables.

Roles of the Property Management Agent –

  1. Setting the Property Purchase / Rental Amount – The first and foremost role that every manager or estate agency has to play is planning the cost of the property or the rental amount. This process would involve the property owner but should be done wisely after considering the important points like the condition of the property and the location where the property is located.
  2. Finding the Right Tenant / Buyer – The property managers will always be accessible to a wide number of property owners as well as property seekers which is why they are the best people to choose the buyers or tenants. Sorting out and picking the best is possible and it will always be a win-win situation for the property owners as well as the seekers.
  3. Screening Buyers / Tenants – For property owners selecting the best buyer or tenant isn't always possible but when it comes to the property managers they can choose the one that is best. This is usually because the agents only choose the property seekers after carefully looking into their profile and getting a check of their background information.
  4. Collecting the Rent – When associated with rental property dealers the property owners can entrust them with the duty of collecting rent well at the time. This saves the landlord from wasting whatever time is wasted in chasing the tenants for rent.
  5. Handling Complaints & Emergencies – Whatever be the complaints of the tenants or buyers should be handled by the agent well within the stipulated time Further, if there are a few emergencies that need attention they again fall under the duty book of the estate agents and should be met with almost immediately or depending on the type of situation that has come up.
  6. Handling Moveouts – When a tenant vacates the premises, the manager is responsible for inspecting the unit. Their job is to check for damages and determine what portion of the security deposit will be returned to the tenant. After the tenants move out is completed, they are also responsible for cleaning up the unit and repairing any damages that may be filed to locate a new tenant and fill the vacancy.
  7. Dealing with Evictions – In case the tenant hasn't been paying rent or has been causing disturbance you might have to get the house evicted by him. In that case, the property owner holds the complete responsibility of getting the property evicted at the earliest possible. Before the eviction, the manager needs to ensure all dues are settled and nothing is payable from both the sides.
  8. Maintenance & Repairs – Whatever is included in the maintenance work is the responsibility of the property manager and should be handled accordingly. Whether maintenance and repairs including hiring someone to take care of the leaks, performing landscapes, remove snow, eliminate thrash – it is all the work of the manager. He needs to ensure the right people are hired and in case someone is taking a day off from work there is always a replacement that is available.
  9. Maintaining Records – Maintenance of all property related documents is just another thing added to the list of the duties that the dealer is required to perform. The agents must ensure proper files are maintained for each tenant or buyer and the files include the necessary information. It should also include any dues that need to be cleared from both the parties.
  10. Responsibility for Taxes – The property manager can assist the property owner with comprehending the most beneficial way to file their taxes about the investment property. The concerned person may also be endowed with the power to file the charges regarding the property on behalf of the owner.

Even though property management might look like an easy management process remember it has a lot involved in it and everything needs to be managed in the best possible ways. Further, the varied roles assigned to the property manager depend on whether he is working on a rental property or the one that is being sold.