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Every property owner knows how hard it is to find reliable property management companies that will handle their property well, appropriately represent the property owner and exhibit exceptional skills in dealing with tenants.
Properties such as apartments and shops can be great investments if correctly managed. If not, the property owner can suffer losses amounting to thousands of dollars in repair costs and lost rents due to difficult tenants who have no respect for the property. This is why it is very important to hire property managers who can not only manage properties well but also implement rules and handle tenants without the property owner having to get involved.
Selecting A Management Company
Before choosing any real estate management corporation, the property manager must evaluate whether the company is capable of handling the expected responsibilities. For this, it is best to get references from other landlords that the company currently represents. It would also be a good idea to check out the company ratings at the local real estate business club. Although all this research may take time and effort, all that is going to be worth it in the long run.
Next, the property owner and the management company must sign an agreement that clearly specifies that the company will be paid only when the property has been rented out. Property management companies that agree to work only on commission are usually the best. This is because these companies get paid only when the property owner gets paid. Therefore these companies will always have an incentive to find good tenants to keep the property occupied.
Most importantly, the management company must be able to ensure that the tenants understand and follow rules. For instance, if the rent is due on the 1st of every month and if a tenant fails to make the payments, then the follow up procedures like sending certified letters must be activated.
10 Questions To Ask Before Hiring A Company
Hiring realty management companies is definitely a good idea but here are 10 questions to ask before actually hiring them.
- What will the fees be
Remember that the fee varies across the country ranging from as low as 4 percent of rent for big buildings to as high as 12 percent for single family homes. Make sure the fee is clearly stated.
- What kind of properties do they manage
Choose a company with experience in handling properties similar to those owned by the investor. Also check out how well the other properties are maintained.
- Who will handle the property
It is best to get the realty management companies to assign a single, experienced person to handle the property fulltime.
- What are the extra costs
Find out if there is an extra fee for showing around or eviction.
- How and when are the fees collected
Confirm facts like if the bills will be monthly or quarterly and if it will be directly deducted from the account.
- What is their advertising like
Understand how they advertise and how much it will cost.
- Cost or time factors to prepare units
Get an estimate of typical cleaning fees and the time taken to clean up a unit before it is rented again by management companies .
- What procedures require owner approval
Fix how much amount can be spent on repairs without owner approval.
- Hours of operation
Find out their business hours on weekdays and weekends.
Understand what reports they send and how often.
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