Working With Property Management Companies
Some landlords are happy to manage their properties, but if you lack the time or the experience, you might want to consider hiring a professional property manager.
Types of Property Managers
Property management firms come in many varieties. A small, independent company might have a good reputation and knowledge of the area in which it is located. A firm that is part of a larger chain might be more appropriate if you have many properties or are attempting to manage business sites.
Some property owners prefer hiring agents that work for a property management firm since they probably have access to more extensive marketing resources.
Most property management firms operate on a “no let, no fee” basis. Regardless of what you are looking for, however, you should contact severals firms to get a sense of what is available to you, what differing services they offer, etc. First impressions count, so make sure you check out the offices of a property manager, as well as their website and their marketing literature. Look at the firm’s advertisements in the local newspaper and online, and use your common sense. If an agent is impossible to contact, disorganized, or rude, the relationship is not likely to be a good one.
Do you know of any other property owners who employ a particular agent and their firm? Personal recommendations are often the best way to select an agent. You should also do some research on the internet to determine whether an agent has performed poorly or acted dishonorably. A disgruntled property owner might have vented his dissatisfaction online.
Find out how long a given property management firm has been in business. This will give you an idea as to the extent of their experience. It is also important to select an agent who has experience working with properties similar to yours in your area. It does no good to employ a firm that manages high-end properties to professionals if you are trying to rent apartments to students. Similarly, an agent who specializes in rural homes is unlikely to have much luck with a city center apartment.
Some agents charge prospective tenants an administrative or registration fee. It can help to prevent time-wasters, but it can also put off some tenants. Find out about any tenant fees so you can make an informed decision. If the fee is too high, you might want to look elsewhere.
It’s usually a good idea to make sure that an agent and his firm are members of a professional association, one that enables them to not only network among themselves but be aware of the latest changes in the laws. They should also be bound by a code of professional ethics and practice. Associations also usually ensure that agents have in place professional indemnity insurance and comply with all laws to safeguard client money and property.
Be careful of extra fees. Many firms make additional money from drawing up an inventory.
Finding a Tenant
Property management firms frequently offer three different levels of service:
Rental only. You simply want a firm to find a qualified tenant for you. This is usually the least expensive service. It is designed to find you a tenant, prepare property particulars, marketing of the property to prospective tenants, conduct viewings, checking tenant references, getting a tenancy agreement signed, and often collecting the first month’s rent, security deposit, handing over of keys and property.
Rental and Rent Collection. Some property management firms, like ascentpm.com, will handle getting a tenant as well as make sure that rent monies are collected.
Full management services. You can also opt for full management services, which involves everything having to do with your property. This might include renting, working with tenants, collecting rent money, having repairs done, and virtually anything else having to do with your property.
Property management firms either charge a flat fee or a percentage of the rent. You should expect to pay between 10 percent and 15 percent of the rent charged for full management service, although this fee is frequently negotiable.
Watch out for additional fees. Many firms charge an additional fee for drawing up a contract. They might also levy a fee when the property is vacant. Repeat fees are another common add-on and allow the agent to collect a commission if the tenant renews their tenancy, even though there is almost no additional work involved.
Some property management contracts also include a clause that gives the agent a percentage of the price if the property owner sells the property to a tenant.
Always read the contract that you are offered to make sure the agent’s responsibilities are clear. Managing agents, for example, are usually authorized to have repairs made up to a certain amount without permission from the homeowner. You should also check to see whether the agent is responsible for gas safety checks.
If you aren’t happy with your agent, you are, of course, free to move to anther firm or simply to go it alone. But you will have to give notice. The typical notice period is two months, though some contracts tie you in for six months.