One of the biggest and most valuable investments people make over the course of their lives is in residential or commercial real estate. Often, it takes life savings from years of hard work to get the property you really want. While managing a property may not seem like a big deal at all first, once you get into the game, the paperwork and other daily tasks can really catch up. This is where property management companies come in.
In addition to helping with managing day to day affairs for your property, these companies can also help add value to your investment. From single family homes to large office buildings and apartment blocks, property management companies can help manage all kinds of real estate operations. It is no wonder then that most real estate investors recommend using a good management company, and consider it one of the essentials in the property business.
When Should You Hire a Property Management Company?
Relying on a property management company can transform the way you see real estate, and be a real game changer for your future. If you fall in one of the following categories, you should seriously consider hiring a property management company:
- You have multiple properties and rental units.
- You live far away from your rental property.
- You have limited time, or you simply do not want to be involved in hands-on management.
- You want to focus on growing your business without having to deal with endless paperwork.
- Your property is part of an affordable housing program and you need help to deal with loans, credits, and returns.
How do I Choose the Property Management Company?
Before you jump right in, it is important that you know the risks associated with handing over your property to a real estate management company. While it is true that most companies work to help increase the overall value of your property, there are a lot of inexperienced operators out there who may do the exact opposite. Therefore, it is very important to choose wisely when it comes to property management companies. We have put together a list of some essential items you should check before entering any contracts:
- Get recommendations from colleagues and local apartment associations. People will recommend companies that know how to do their jobs correctly and make properties better places to live in. Moreover, you can be comfortable knowing that the recommended management company has local experience and is known well throughout the area.
- Visit websites of the Property Ombudsman (TPO), the Ombudsman Service and the Property Redress Scheme (PRS) to search for approved professionals in your area. All three organizations maintain updated databases of real estate management organizations operating throughout the United Kingdom.
- Check how many properties and units the organization you are considering manages. Additionally, be aware of a management company that has their own properties; they are more likely to focus on them first, and your property may get left out.
- You should also check how often managers will be personally visiting the sites in order to inspect them periodically. It should also be decided on who will manage maintenance issues and if there will be any extra charges for this service.
- Determine the charges beforehand. Most managers charge between 5 and 10 percent of the rent generated from your property. However, some companies determine this amount on the maximum possible rent, and expect to be paid whether the property is occupied or vacant.
At the end of the day, make sure to read the fine print before signing up with a real estate management company.
What are the Benefits of Hiring a Property Management Company?
A good management company is worth every penny you spend. Here are some ways they can help make your life easier:
Dealing with Tenants and Handling Maintenance
From tedious tasks like screening applications to planning out payments and completing tons of paperwork, management companies have the manpower to get the job done quickly. Most companies use a thorough vetting process to find tenants that pay on time, rent for long periods, and have a clean record. You will also be protected from rental scams and lawsuits resulting from misuse of property. Good maintenance is necessary to keep tenants happy and a professional management firm has access to contractors who perform routine maintenance work and all kinds of repairs. Having in-house maintenance staff increases the value of your property, and results in considerable savings as well.
Legal Issues
One of the biggest advantages of using a property management company is the protection it offers from all types of legal issues. From angry tenants to accident victims, property management companies stay on top of it all. With detailed knowledge about state and local laws for commercial properties, these companies can cover most situations. This includes safety of the property and living conditions. Additional duties range from handling security deposits and lease agreements to conducting inspections and handling the eviction process.
Get Your Property Ready for the Market
Experienced property management firms will complete multiple tasks to help get your property on the market. This includes thoroughly inspecting the property, gas safety inspections, electrical inspections, EPC, making any cosmetic changes required, and suggesting other improvements that increase the residual value and promise to boost revenue.
Furthermore, these organizations also help determine an appropriate rental rate based on the location, average income in the area, age of tenants, and other factors affecting the local market. With access to all this information and more, real estate management companies are much more informed in this entire process and can make better decisions.
One important element of getting your property filled up is marketing; and most management companies have dedicated marketing departments to help achieve targeted occupancy in a short amount of time. They can also get cheaper deals due to volume discounts and market your property online.
Value of Investment
A good property management company will seek to take every possible step to increase the value of your investment. By putting into place strict procedures to comply with local regulations, carry out periodic maintenance, and supervise the general appearance and daily operations of your property, these companies will have a positive financial impact in the long run.
Personal Benefits
By handing over management functions to professionals, you can relax and enjoy life as you have always wanted. Less stress from not having to deal with tenants and plenty of time and freedom to do what you want will greatly improve your lifestyle and health.
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