Property Manager – Van Nuys

Selecting a Company Most management companies will provide the client and referring broker with free written proposals containing a sample management agreement that describes the services to be provided, spending limits, reports, and fees.

If the management agreement seems reasonable, a visit to the management company offices is useful to meet the property manager and accounting personnel who would be assigned to the property. The management company should provide a variety of references. Ask to visit similar properties that the company manages.

Management agreements usually are for one year and renew month to month after the first year. A penalty usually exists if the owner breaks the contract in the first year.

Management fees normally are charged based on a percentage of income collected with a minimum monthly base fee. Larger properties usually command a lower percentage rate (for example, 2 percent) than a duplex or four-plex that may be quoted up to 10 percent.

Fees are negotiated on a per-property basis and depend on many factors including property condition, location, and size. Leasing and other auxiliary service fees are separate and in addition to management fees.

Making a Referral The decision to give a property management company referral deserves serious consideration and should be done with due diligence and careful thought.

Some property management company agreements contain a clause giving the management company the exclusive right to sell the property during management and up to one year after the termination of the management agreement. Many brokers refer clients for property management only and want to represent the client if he or she decides to sell the property. Many brokers want assurance that the property won’t later be listed by the management company. Some brokers may insist that the property management company sign a non-compete letter that they will not list the referred property.

Establish Relationships Be prepared to help clients select a good property management company to increase their properties’ rents and asset value.

It’s a good idea to establish mutual working relationships with management companies that specialize in various property management niches. In turn, these management companies may refer clients to you who want to sell properties.

From: http://www.ccim.com

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