Managing multiple properties can be a time-consuming process that many landlords do not care to handle. When you don’t have the time or the desire to manage the properties on your own, a property-management company can manage the day-to-day duties required to keep your properties filled and earning revenue. However, a property-management company should never be allowed to handle or have access to some areas of your business.
Property Management
Property management is the process of managing and taking care of real estate properties. Management tasks include showing the property to potential tenants, screening rental applicants, collecting rent, repairing and maintaining the building and grounds and advertising and marketing the property. Property-management companies are in the business of handling these day-to-day tasks for property owners. The management company essentially runs the bulk of the owner’s business for her while she looks for more properties to purchase.
Hire a Management Company
Management companies charge fees for their services and each company has a particular way of dealing with tenants and properties. Creating a list of questions to ask while interviewing companies can ensure that all your concerns are covered. Key questions to ask include the dollar amount of the monthly management fees; whether there are additional fees, such as a per-lease commission; how late rents are handled; how maintenance and repairs are conducted; and how the company qualifies tenants. When choosing a management company, use a written and signed agreement outlining all requirements. A lawyer should look over the agreement before you sign it.
Protect Your Business
A property-management company should not be in charge of paying your company’s bills. A missed payment means a late fee you must pay — late charges may damage your credit rating. Hiring a bookkeeper to record transactions and prepare checks for payment is well-advised. As a safeguard, employees should never have signing access to your company or personal bank accounts. Including an “opt out” clause in the management company’s written agreement can allow you to exit the relationship if you are unsatisfied with the company after a pre-stated date — 30 to 60 days is usually adequate to know whether you are happy or not with the situation.
Find a Management Company
Asking other property owners for referrals may be the best way to find companies to interview. Other property owners are a good resource for honest information about management companies and other issues of concern. Local real estate investment associations, the chamber of commerce or the apartment association in your area are good places to locate other property owners and management companies. The Institute of Real Estate Management and the National Association of Residential Property Managers are other good sources of information.
by Alex Burke
