Proactive Property Management: Watch Your Property Value Grow
“It’s 2:00 a.m. and the telephone rings. Startled, you sit up and pat your hand on the dresser in a desperate hunt for the receiver. A voice at the other end is all too familiar. It’s Helen, your tenant and constant phone companion. She’s not sure, but thinks there may be an animal in the house because she heard a noise.”
If you are a landlord, this scenario probably seems familiar. Thousands of people across the country get involved with real estate and choose to manage it themselves only to find they burn out very quickly. Many of those eager property buyers had no idea the amount of time and expertise that it takes to efficiently manage a property.
Unexpected problems arise that new property owners have no idea how to handle, and all the glossy brochures about making money in real estate failed to mention the night calls, sudden disasters and lousy tenants who destroy hard won investments. At this point, investing in the stock market doesn’t sound that bad. What a property owner generally discovers is that many of their problems will disappear with the addition of a good property manager. If they can figure that out before they give up, they have made the first step to an easier existence. A good property manager has the knowledge and skill to ask the right questions, fill out forms and solicit as much information from a prospective tenant as possible prior to renting to them. Avoiding just these mistakes can save a landlord literally thousands of dollars per year.
For example, in Queensland, Australia in 2006, 63.7% of the disputes filed by tenants involve properties that were managed by property owners. Surprisingly, property owners counted for only 12.7% of the market share, and this 12.7% was involved in nearly 2/3 of the disputes filed. Of the other 87.3% of the properties, these were managed by property managers and not the owners. In these cases, only 36.3% of the disputes were filed. Saved legal fees alone could wind up paying for a decent property manager and the stress and headache of trying to do-it-yourself would be eliminated.
Good communication is the second most important facet of managing rental properties. Good communication keeps tenants happy and eliminates misunderstandings that grow to big problems if left unattended. In order to prevent a high rate of turnover and keep the best tenants it is important that you stay in contact and maintain a scheduled visitation for upkeep.
Disasters in properties tend to take up all of the landlord’s attention and they seldom happen at a time when it’s convenient. As a result, property owners will invest great sums of money with little regard to the income that’s being produced from the property. Vacations and holidays disappear in the maelstrom of repairs and crises.
The ever-changing landscape of tenant law and tax law create new reading materials and record keeping nightmares for the average landlord. A mistake in these areas cost thousands of dollars in fees, fines and penalties.
Many people realise after a few bad experiences that the knowledge of a good property manager gets rid of the bulk of their frustrations and will save them a significant amount of money in the long run. Property managers who plan, execute and maintain a building, communicate on a regular basis with the tenants and provide lower upkeep costs and a better selection of tenants. Good property managers will take a proactive approach to maintaining and dealing with problems which reduces costs overall. When a landlord relinquishes control into the hands of a person skilled in property management, record keeping is no longer an issue and the property owner can get on with his life confident that problems and decisions will be solved in a timely manner.
There are a number of qualities to look for when shopping around for a property manager. A veteran property manager will have a good knowledge of the changes being made in real estate law. They will be able to interpret the complex rental rules and regulations. They will communicate with both parties on a regular basis – property owner and tenant. Sudden repairs as well as long term maintenance will be handled and a step-by-step plan will be implemented for scheduled maintenance and inspection to eliminate high repair costs later on. Good property managers return phone calls efficiently, and are proficient at handling arrearage in a way that is both professional and effective.
Property managers, like any other professional, operate at peak efficiency when they maintain a comfortable workload. Many times a heavy workload produces unacceptable results. Efficiency levels diminish after the property manager assumes responsibility for more than 85-110 properties. It’s important to find out the ratio of managers to property before you contract with a firm.
Filed under: Management