Property Management is a crucial activity that needs to be handled in a professional way. Because of its importance, you will find investors hiring a property manager or property management firms to manage various commercial properties. While most of the property management firms around do you a splendid job in effectively managing properties, there are some who mess up the management work.
For this reason, if you have to Google various cases about property management, you are bound to bump into a number of investors giving horror experiences of their engagement with some property managers.
Property Management is it difficult and challenging activity should not be taken haphazardly. It is a service based industry whereby an investor is always seeking for a property manager who is able to exceed the industry standards.
Thus, as a property owner, you should aim to pick a company that has your best interest in mind. Although you might have to take into account that sometimes things might spiral out of a property managers’ control, just find a manager that can be on things on top of things when they go wrong.
With that in mind, let us now discuss the property management issues you might encounter and also give you useful tips on how to avoid them.
- Market rents that are below expectations
For most of the real estate investors around, rent forms a large chunk of their income stream. If you as a commercial property investor wants to maximize on the potential income from properties, you should claim for rents that are at par with the prevailing market rates. To examine whether the property manager keeps with what is offered in the market, you should also do your own rental comps.
You can start by asking other property managers that are in your area about their opinion on the rent payable. You can also visit popular real estate websites and apps to do some rental comps. Although there are circumstances that can be acceptable when the rent offered fall below the market rates, in the most cases discuss with the manager to see where discrepancies are coming from.
- The services appear expensive
Depending on the region the property located, your property management cost will be determined by many factors. Some of these factors are;
- Property location
- Manager competition
- Anticipated monthly rent
- Current rental market rates
- Property quality
You will be in a better position to negotiate with a property manager if you comprehend the amount of work required and surrounding local market.
- Hidden fees that are challenging
Main Industries usually find hidden fees a challenging problem to address. Even in the real estate sector, you might find hidden fees much harder cost to absorb in your investments.
Therefore, do not be hesitant to ask clarification questions on anything that you have read and not understood before signing any property management contract. You ought to sit down and discuss with the property manager about the pricing that is being offered.
- Communication /reporting being poor
Non-communication is dangerous in any deal-making but smart and timely communication is ideal for making deals. You ought to have a manager that is comfortable with handling various modes of communication and is able to communicate with you at regular intervals.
A property manager at always hides behind an administrative assistant or auto-attendant is not reliable. It is your right to quickly and clearly as well as receives consistent monthly reports about the status of your property. You should ignore any company that fails to deliver reports or exhibits some deviation in its reporting.
- Failure to get a clear message from the company
After hiring property management services, examine whether:
- When you call the management office, a different person who will always take the call.
- You question but you get diverse answers.
- You have more questions than when you first pick the phone.
Many property management companies usually offer a common problem of overstaffing and staff turnover. Whenever you sign up for such management services, always ask about staff stability person you will be dealing with.
- Getting a bad tenant
Amongst the most expensive mistakes that an individual investor can make when it comes to rental property is finding a bad tenant. It is always paramount to do an upfront and intense background check of all the tenants occupying the building.
If only managers would have taken into account this simple step, most of the nightmare stories involving landlords and tenants would be avoided. Hard time or bad luck can allow such kind of tenants occupy the building even after strict screening exercise. Even after thorough screening, such a situation is not easily avoided.
In case you encounter a bad tenant, find out whether it due to a negligence of the manager or something beyond the manager’s control.
- High maintenance costs
Two main ways of handling maintenance in properties; through trusted vendors or in-house staff. Usually, each of these kinds of maintenance type has its own advantages and disadvantages. It is your duty to examine which maintenance system your property manager is utilizing. As you find out about that, also inquire what can be done to keep the rental property costs down.
- Lacks Inspections
If you own any rental property, then you avoid carrying out inspection. It is one of those core tasks that ought to be done regularly otherwise you may have to suspect that property management company is incapable of servicing clients or it is understaffed. Finding out who is in charge of services and asking them is the best way to find out how they do inspections.
- Not having owner’s mindset
If a manager wants to really understand the satisfaction and stresses that come with operating rental business, then, the property manager should act as the owner of the property. In this way, the manager will be able to communicate effectively and strengthen the business bond that exists between the owner and the property management service company. Therefore, it means that property managers will likely not make the best if they lack a mindset of being the owner.
To wrap it up
Whenever you look for a property manager to manage the property investment, you should be able to gauge whether they address some of the problems stated above. Interview some property managers to ensure that they are serious about the property management work and you’ll have a strong start in the property management process.