The Ultimate Guide to Property Management
Buying and developing a property is one of the most resource-consuming investment. As such, every property is always keen for the project to start generating value for them. Similar to any business, you will earn a return on the investment you made. Therefore, the last thing you want to hear or experience is your property not making any money. To avoid making losses with your property, you will be required implement good management strategies.
You will have to familiarize yourself with the latest property management techniques and the technologies that come with them. Alternatively, you may avoid the hassle and outsource the function to reputable property management firms. Each of these options comes with their strengths and weaknesses and you need to be aware of them.
Should I Hire a Property Management Firm?
Among the critical decisions you will be expected to make regarding your property, is whether you will manage them yourself or you will outsource the function. The process of outsourcing entails delegating the responsibility of managing and overseeing the day to day operations of your real estate assets to a third-party firm. This is a decision that requires a lot of research and vetting of available options.
The idea is that you want to ensure that you are working with the best firms in the industry such as Phoenix AZ HOA management. The first step to making the right decision is understanding their expected role. The following are the functions of a property management firm:
- Collection of rent
This is regarded as one of the primary roles of a property manager. This is what brings about revenue and return on the investment made. The property manager will be expected to develop an easy rent payment mechanism for the tenants and ensure that it is included as a clause in the lease agreement.
- Property maintenance
Any property with tenants will from time to time demand maintenance activities. Some of the operations are actually carried out on a daily to daily basis such as cleaning the floors and corridors. Other maintenance operations such as house repairs and plumbing will require the attention of the property manager once informed by the tenant. Dealing with complaints from tenants is also considered part of property management.
- Tenants souring
Once a house is vacated, it is the role of a property manager to advertise the vacant premise and find a suitable tenant. Therefore, the will be required to utilize their expertise in screening of potential applicants. They will also be required to come up with a screening process that is not discriminatory in nature to avoid raising legal issues.
- Handling defaulters
Lease agreements exist for a reason. They are meant to protect both the landlord and the tenant. For the property owner, it offers them a legal means for enforcement in case the tenant defaults on rent payments or contradicts the terms agreed in the lease agreement.
- Record keeping
To maintain a transparent process, there is a need for efficient bookkeeping in property management. For starters, it is a good way of ensuring that you do not have trouble with the authorities when it comes to paying taxes. It also helps the property manager remain accountable to you as the owner.
Property Management Measurements You Should Be Aware Of
Like all other businesses, it is important to understand the figures that matter in your investment. Some of the performance metrics in property management include:
- Occupancy rates: relates to the number of units that have tenants in relation to the total units available.
- Rent turnover: relates to the number of tenants that vacate your property either at the end of their lease or before this period. This metric can help you understand the overall attitude of the tenants towards your property.
- Property maintenance costs: this relates to the overall costs involved in managing your property.
In conclusion, this article has revealed that property management should be approached from a business perspective. Your real estate assets should be able to offer a return on the investment made. This is why you will have to make an important decision on whether to manage the property yourself or outsource a property management firm.