Should You Hire a Property Manager Or Not?

Using a property manager has both pros and cons. There are no hard and fast rules regarding whether you should hire one or not. You have to evaluate the answer based on your own situation. The following are some considerations to take into account before you jump to a conclusion.

Time Commitment

A lot of real estate investors have a full time job so they do not have enough time or energy to manage properties. Especially if the house is situated remotely, many investors might feel they cannot manage on their own or do not want to travel. If fact, you can manage on your own.

Cost Benefit

If you have several properties or an apartment complex in one area, using a property manager to manage all the property may be economic. The manager will be able to combine expenses and costs. For example, they can purchase maintenance materials in bulk for all the rental units. If you don't have several rental units in one area, but together with your friends' or families' rental units you do. Then you can afford to hire a professional dedicated property manager.

The Nature of the Rental Market Where your Property is Located

If your rental property is located in an area where renters mostly check out the rentals through the local property management companies, then you have no other choice but to hire the company. This may happen in small towns where there is only a handful of management companies.

Tenant's Characteristics

Some tenants are not easy to deal with. You may find some tenants that are constantly paying late, asking for a lot of unnecessary repairs, complaining about everything, or having difficulty keeping up the premises. A property manager may handle the situation better than you as you might be emotionally attached to your property and less likely to handle many issues impartially. What's more, the tenant might try to take advantage of you. They may take it more seriously if they are dealing with a professional property management company instead of an individual.

Does your Property Need Frequent Repairs or Maintenance?

If your property needs frequent repairs due to its age or other reasons, having a property manager may help you if repairs are a burden. Usually the property management company either has its own in-house repair service or contracts with outside vendors. In any case, you should ask about it before hiring them and understand how much they charge.

What Kind of Service do you need from a Property Manager?

Do you need a full service property management, which includes placing tenants and ongoing management service? If the condition of your property is good or new and not much repair is anticipated, you may save your money on the ongoing management service part. If you already have a tenant but you are moving out of that area you can use a local property manager to collect the rent and do the maintenance work.

Lack of Interest in Managing

Some rental property owners just do not want to get involved in managing the property at all. They rather have someone look after their rental properties so they can enjoy their life doing other things. That is absolutely ok. Enjoying life is also very important.

The purpose of hiring a property manager is to free up your time and make your rental investment successful. Nevertheless, hiring a poor one is worse than hiring no one. You can end up spending more time and money to rescue your property.

If you hire one, keep in mind it does not mean you have to be a completely hand-offs owner. You should keep in regular communication with your property manager so he understands you do not treat your real estate business lightly. How to hire a good property manager belongs to another blog we will write about.

Make Finding a Property Management Co Easier on Yourself by Asking theRight Questions, Part 1 of 4

This is a four part series where we have outlined important questions to ask a property management company before hiring them.

Series 1 Company's credentials
Series 2 Property management services
Series 3 Property management fees
Series 4 Tenant screening process

Property management companies come in all sizes, capabilities and expertise. Just because one works for one investor doesn't necessarily mean they will work for you. Below we have outlined some important questions to ask a company during your initial interview process. Their answers to these questions will provide insight into their business capabilities, credentials and areas of expertise,and can provide you with an understanding of the type of services they offer which are important to you.

Series 1 - Credentials

Years in the business - Years in the business can equate to experience and stability within a company. Of course things such as changes in key personnel or senior management can jeopardize this. But generally this is a good indicator of a company with a solid foundation. Chances are they have solid processes and procedures in place to streamline the management of possibly hundreds of properties all at the same time. Make sure these "years in the business" are related to property management and not sales only. Just because they have 30 years running a real estate sale department does not make them an expert in property management or tenant relations.

Done business under another name - You should do your due diligence and contact the Better Business Bureau or other reliable service such as Dun & Bradstreet to see if the company your interested in has a good track record or any consumer complaints filed against them. The Better Business Bureau assigns grades from A to F with pluses and minuses. A+ is the highest grade and F is the lowest. The grade represents BBB's degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns. If the company your interested in has done business under another name you will want to check the track record of this business entity also.

Property Management Only or Sales also - Some investors will only hire companies that deal strictly in property management when it comes time to managing their rentals. These companies are focused on every aspect of property management since this is all they do, and they will not be influenced in trying to get you to sell and making a sales commission.

Other investors may find security in knowing they have a management company that is well verse in sales. A company that offers both sales and property management can be very useful if you plan on buying multiple properties and want to work exclusively with one company for buying and managing all these properties. These companies typically will have a good grasp of the overall market condition whether buying, selling for owner occupied or investment.

Real Estate or Brokers License - In order to practice business as a property manager some states require they process a Real estate or Broker's license. To receive a license requires extensive education as well as passing the state's licensing exam. In order to keep their license current they must also participate in ongoing courses. These courses and license designations cost money and show they have a commitment to their trade. Other states may only require a certificate, which consists of basic classes and passing a class exam.

Staff personnel - Some management company may employ hundreds of employees, while others may be run by a sole proprietor. What you want to find out here is the ratio between their portfolio of rental properties and managers they employ. In other words, if they manage several hundred properties yet only have two staff managers, they may be overworked and unable to give you the service you expect.

Type of properties you manage - Some property management companies manage all types of properties while others specialize in one type, such as residential. If you have a single-family house that needs managing, a company with 90% of its properties being commercial property may not be a good fit. Typically commercial and community association management is the most profitable for a property management company. And some residential property management company may prefer to manage only multi-unit apartment buildings of a certain size and not manage single family houses at all.

Property Management Companies - How Essential Are They?

Property management is very important to make a regular flow of money. If the property is vacant or is not well managed it will cost you infact you will be losing some amount of money every month. So before you property lose it charm and value, it is better to manage it and make some goods flow of money every month. It is true that people face tough time to maintain the assets, but it can be done easily by hiring the reputed and professional property management services. They offer you their services to maintain your house, flats, apartments, buildings and many other possessions in a great style, so that people would hire them on rent.

Today we often see that people spend their money in a well managed and well maintained property. Be it for hiring the room, flats or apartments on rents or property for business purposes, people usually how well it is managed. They check out everything before hiring, so if you want to make a goods income from your property it has to be well maintained. Managing your assets will truly give a goods return every month. So if you could not do it yourself, hire one reputed and professional rental management company.

A rental management company can range is size according to their dealing processes. Some deals only with rental management while the large corporation deals in selling, buying and leasing the properties on rent. A small property management companies largely works for landlords and the property holders so that they can efficiently manage the property and give a good return in their hand every month. In return they also receive some percentage for their services they provide in managing the assets of the property owners.

Some of the basic services offered by the management companies includes, collecting rent, rent agreement, paying utility of electric bills, handling maintenance issues, document of lease agreement along with enhancing tenant relationships. However, they also maintain the document of land tax, yearly basis expenditure and income for you. The accounting side includes everything from maintaining the check registers to updating the increment in the rents and turnover. However the collection of rents and maintenance activities are carried out the expert staff member of these companies while the accounting part is well maintained by the property managers. They keep good records of all the expenditures, tax, rent agreement, lease agreement and many other details related to managing of property.

Not only they collect rents and maintain the property, but before leasing the room on rent they also enquire in details about the people to whom they are leasing the room. They also tackle infact look after the problems of the tenants related to the room they are staying in. Sometimes tenants face like clogging of water drainage, water problems, power cut off, painting of rooms, maintenance, etc these entire problems are efficiently handled and taken care of by the rental management company. They take care of each and every needs and requirements of the tenants so that they do not face any problems while staying in the rooms, apartments or flats given on lease by these rental management companies. So in order to make it more precise and clear it is always goods to hire the services from the property management companies to main the property charm and value. They will also assure you goods return of money every month out of your property.

Property Management - Commercial Management

Property management is an ever growing need as more and more people are now opting out of buying homes due to aspects such as the increase in mortgage prices. Renting is now becoming the more popular way of gaining property. It is because of the fact that more of us are now renting property that that need for property management has grown so much. It should be noted that property management requires time, intelligence and good attention to detail as well as management qualifications.

Property management is the job of looking after the properties that people rent out. This is the same for residential and commercial property. Whatever type of property you have as long as you are renting it; you will be able to get the help of property a management team.

Property management companies have the responsibility to deal with multiple responsibilities and aspects of the management and ownership of real estate. The duties of a property management company is to negotiate and stabilise a relationship between the landlord and tenant. The duties performed by a property management company are pretty much the same if your property is a residential or commercial but here we are mainly going to be looking at commercial property. Whether your property is an office block, a retail store or a bar/restaurant the duties that a property management team will perform for you are:

o Collecting rent

o Handle your letting

o Asses potential tenants

o Administration services

o Maintenance of the property

Commercial property management is an essential aspect of the property market if you want to increase the appeal or value of your property. It will allow you to get on with your renting business while the management company gets on with the day-to-day running. The extent of the service that is provided by a property management team is as flexible as you want it to be; it can be used as much as you need it to be.

A professional commercial property management service maintains and raises the level of occupancy, which enables a steady income. This is because a property management company keeps your commercial property in good condition in order to bring in business for the landlord. Your commercial property needs good curb appeal. This is achieved through keeping the structure, landscape and parking elements of the property in a clean and welcoming condition.

Your commercial property needs to be kept in good condition in order to attract customers to use your business. You need to ensure that your property is in good condition to attract businesses to set up shop within your property.

If you have invested within the property market then you will want to ensure that you are getting the most from your investment, which is where commercial property management can help you. By keeping a well run and well maintained property you will generate interest within your business and therefore attract more custom.

If you would like more information about what a commercial property management team could do for you get in touch with an expert company today.

Property Management Fees Explained

When you hire a property management company to serve as the liaison between yourself and your tenants, you want to be sure you're getting the best possible property management services for the money. The services a property management company provides can range from ala carte to an all-in-one inclusive package. Along with that comes an array of fees for each. There is no set in stone fee structure we can provide you. But we can educate you on what common fees to expect and what each is commonly for. In the end it will be up to you to compare company fee structures and choose the best one that fits within your budget. Below are some of the most common fees and what service they provide.

Commission

This is an ongoing monthly fee charged to the owner to compensate the property manager for the responsibilities of overseeing the management of their property. This fee can vary from as little as 3% to over 15% of the monthly gross rent. In place of a percentage some managers may charge a flat monthly amount which again can vary from $50 to over $200 per month. All property management companies generally charge this fee.

Lease-Up or Setup Fee

This fee is charged to the owner to compensate the property manager for their initial time invested and resources used in setting up an owners account; showing property and/or other activities resulting in tenant placement. I guess you could look at it as a "finders fee" for placing a tenant in your property. Once a tenant has been placed and first rent income comes in, the property manager will deduct this fee from the rent proceeds. Some property managers have been known to require this fee upfront prior to tenant procurement. Usually this fee is non-refundable once the property manager has started the process of tenant procurement or any legwork has been initiated with the property. This fee can vary from none to as much as the first months rent, and usually is a one-time fee per tenant.

Lease Renewal Fee

This fee is charged to the owner when a property manager renews a current tenants lease and covers the costs of initiating paperwork or communication involved in implementing the new lease document. A property manager may also justify this fee if they perform a year end inspection of property. This fee can vary from none to $200 or higher, and may be charged every time a lease renewal is implemented.

Advertising Costs

Depending upon the property management company's contract, either they will pay the advertising costs or the owner or they could split the costs. If the manager is willing to cover this cost, most likely they will charge the lease-up or setup fee as outline above. If the management company covers this cost make sure to find out what type advertising or marketing of your property is included. If it's placing your listing on their own web site and other free online classified sites you may not be getting your monies worth. They are many good rental or tenant resource online web sites that bring in qualified tenants for a reasonable fee and you will want to consider these. And don't forget about print media, yard signs, listing on the MLS or even an open house. Nothing is worst than having your property vacant, bringing in no money only because you or your property manager skimped on advertising.

Maintenance Mark-up Charges

This is one of those costs you may never really of known about or had it disclosed to you. A "Mark-up" is a charge over and beyond the final bill on maintenance and/or repair work done to your property initiated by your property management company when using their vendors or in-house maintenance staff. This should be disclosed in your Manager/Owner contract which usually will state the markup as a percentage above the final invoice from vendor. For example, your manager had to call a plumber to replace the dishwasher in your rental property. Total charges for completing the job: $400. If your property manager contract states you will incur a 10% markup on all maintenance work the actual cost to you will be $440. Just one of those things to be aware of as these all eat into your profits.

Early Cancellation Fee

The dreaded "3 months and no tenant". Your property manager insist he or she's doing everything they can to find you a tenant. But here it is 3 months and still no tenant; what do you do. Well, look at your Manager/Owner contract and that might be your deciding factor. I am not a fan of this fee, and believe it to be an unnecessary fee and for you manager out there this could be the deal breaker. I'll tell you why; if a property manager is doing their due diligence and keeping the owners in the loop as far as decision making, market conditions and communication lines open an owner will not be second guessing his property managers abilities. The odds of this scenario happening is unlikely but you must be prepared for it. A cancellation fee can range from none to over $500. To be fair, some managers legitimately deserve this fee especially if they have pocketed advertising costs, incurred lots of legwork and time invested in your property.

Property Managment Vs Asset Management

One of the biggest mistakes I see apartment and commercial real estate investors make is leaving their investment property in complete control of their property manager. Even the best property management companies will not look at things like the owner.

I have seen this literally cost investors thousands of dollars in lost cash flow and property value, so it is definitely a mistake you want to avoid.

In this article I want to discuss the importance of being an Asset Manager, rather than a Property Manager. First, let's define these two terms:

Asset Manager
Focus is on maximizing return and property value for the investor(s).

Property Manager
Focus is on day-to-day management activities for a property.

"Think Like a CEO..."
If you want to maximize your returns as an investor, you must think like a CEO, and not a property manager. Your focus should be continually on how to maximize the return from a property and increase value.

I see a lot of investors that lose track of this, and leave things up to their property manager, thinking that is their job. It is not.

Here are the things you should be focused on as an Asset Manager:

1) Increasing Income
2) Reducing Expenses
3) Improving Property Value
4) In short, maximizing returns and property value.

Continually ask yourself questions, such as:

- How can we increase rents? Are all of our rents at market levels? Can we charge higher rent for preferred units, such as near a pool?
- Can we reduce our property taxes by protesting the assessed value? Can we reduce our insurance expense by changing companies? How can we reduce every single line item expense - even by a small percentage?
- How can we increase the value of the property? What improvements would maximize value?

None of these activities should be done at the cost of deferring maintenance or reducing the property value over time. As the CEO of your investment you need to see the big picture - whether it is a duplex or several hundred units.

Your property manager, on the other hand should focus on the day-to-day property operations to keep things running smoothly, such as:

1) Property Maintenance
2) Marketing and Rental of Units
3) Collecting Rents and Paying Bills
4) Enforcing Property Rules and Procedures

Good property managers will also perform activities that could be considered asset management, such as performing regular checks to verify market rents are maximized, testing marketing results, and finding ways to reduce expenses.

However, I would caution against leaving everything up to your property manager, because ultimately, it is your responsibility to increase your returns and property value.

By the way, if you liked this article, you will probably like my new report and video series, "The 7 Biggest Mistakes Investors Make When Buying Income Property."

Should You Hire a Property Manager Or Not?

Using a property manager has both pros and cons. There are no hard and fast rules regarding whether you should hire one or not. You have to evaluate the answer based on your own situation. The following are some considerations to take into account before you jump to a conclusion.

Time Commitment

A lot of real estate investors have a full time job so they do not have enough time or energy to manage properties. Especially if the house is situated remotely, many investors might feel they cannot manage on their own or do not want to travel. If fact, you can manage on your own.

Cost Benefit

If you have several properties or an apartment complex in one area, using a property manager to manage all the property may be economic. The manager will be able to combine expenses and costs. For example, they can purchase maintenance materials in bulk for all the rental units. If you don't have several rental units in one area, but together with your friends' or families' rental units you do. Then you can afford to hire a professional dedicated property manager.

The Nature of the Rental Market Where your Property is Located

If your rental property is located in an area where renters mostly check out the rentals through the local property management companies, then you have no other choice but to hire the company. This may happen in small towns where there is only a handful of management companies.

Tenant's Characteristics

Some tenants are not easy to deal with. You may find some tenants that are constantly paying late, asking for a lot of unnecessary repairs, complaining about everything, or having difficulty keeping up the premises. A property manager may handle the situation better than you as you might be emotionally attached to your property and less likely to handle many issues impartially. What's more, the tenant might try to take advantage of you. They may take it more seriously if they are dealing with a professional property management company instead of an individual.

Does your Property Need Frequent Repairs or Maintenance?

If your property needs frequent repairs due to its age or other reasons, having a property manager may help you if repairs are a burden. Usually the property management company either has its own in-house repair service or contracts with outside vendors. In any case, you should ask about it before hiring them and understand how much they charge.

What Kind of Service do you need from a Property Manager?

Do you need a full service property management, which includes placing tenants and ongoing management service? If the condition of your property is good or new and not much repair is anticipated, you may save your money on the ongoing management service part. If you already have a tenant but you are moving out of that area you can use a local property manager to collect the rent and do the maintenance work.

Lack of Interest in Managing

Some rental property owners just do not want to get involved in managing the property at all. They rather have someone look after their rental properties so they can enjoy their life doing other things. That is absolutely ok. Enjoying life is also very important.

The purpose of hiring a property manager is to free up your time and make your rental investment successful. Nevertheless, hiring a poor one is worse than hiring no one. You can end up spending more time and money to rescue your property.

If you hire one, keep in mind it does not mean you have to be a completely hand-offs owner. You should keep in regular communication with your property manager so he understands you do not treat your real estate business lightly. How to hire a good property manager belongs to another blog we will write about.

RealInvestorTips.com specializes in investment property mortgage loan modification (Chase / Wanu, Wells Fargo / Wachovia, Citi, Bank of America / Countrywide, American Home Mortgage, and more), short sale for investors and rental management. The website also provides extensive resources on various owner financing tools like Lease To Own / Lease Purchase Option, Land Contracts / Real Estate Contract, and latest real estate trends.

Property Management Issue - Hire A Property Management Company

Property is the biggest material asset a person has. If you have some properties, it is very good for your financial security. Manage your properties to make them as lucrative as possible. But managing properties is not as easy as it sounds. This is the 21st century and is a market driven world. People remain busy in their life and do not fond time to focus on these issues. So, they prefer hiring professional property managers to get managed their properties.

Property management company is basically a liaison between the property owner and the tenant. The company provides comprehensive management of all your properties. The company will help you in selling the property and in rental management. The professional dealers have knowledge about the current market trend and will let you find suitable customer who can offer you maximum amount. The company will also look after the paper work related with the sell of property or in renting the property to the tenant.

The main need of the property management companies are felt when you have to rent the property. Renting property is really a big task. You have to find the suitable tenant and rent the property after accomplishing paper work. Renting does,t not means finding a rental and put the house or office on rent. You have to take care of many things. The tenant must have good and fair background. You have to make rent agreement. You also have to collect the rent monthly and look after the maintenance of the property. All these tasks can be handled by only a professional rental manager. They will do all these tasks and collect the monthly rent and will deposit in your account. The issues of renting and collecting rent will be solved with their assistance. Professional property management companies also look after the maintenance of your properties. They send their staffs time to time to your place to see the condition. If there is some deformity, they arrange repairing.

This service is not only helpful for the property owners but also for the tenants. Tenants can visit the property dealers and can find the desired space easily. They can get good ranges of flats, shops or offices. They can make choice according to their budget. In this way, they are good and an important part of the society. They render valuable services. However, the property is basically meant to help property owners. So property owners hire the services offered by professional property managers and make the profit.

Reasons Why You Need to Hire Property Management Company

There are very many reasons as to why a person may need the services of a property management company. One of them is to allow the people who are professionals manage your property hence minimizes the chance of loss of investment. If you live in Dallas Texas, then you are familiar with all the major property management Dallas companies. There are very many property management companies and this has indirectly increased the investments by people as they can now rely on the property management companies to manage all their properties for them. However there are more reasons as to why people opt for a management company to manage their property rather than do it themselves. Some of these reasons include the following;

Rent- a professional property management agent has systems that are aimed at making it easier to collect the rent and ensure that the rent is paid on time as well. This will in turn ensure that you have a steady cash flow which is very vital for anyone who wants to become a successful investor.

Financial records- the property management companies will do all the hard stuff for you. They will keep all the necessary records which include the end of year tax returns and they will also manage the security deposits for you. This makes your work easier and you can concentrate on making more investments and hand them over to the property management Dallas for proper management.

Eviction- in the worst case scenario a tenant might refuse to pay rent anymore. Such tenants can be a real headache for any person. Evicting them can prove to be even harder. However if you have a management team working for you, this should not be a problem as they will handle everything on your behalf.

Freedom- the best thing about having a property management Dallas company manage your property is that you don't have to live in the place where your property is located. You might even take a vacation or relocate to another country where the weather is much friendlier and not worry about your property as there will be someone managing your property on your behalf.

Cost- the cost of managing your own property is very high. The costs of hiring staff members and accountants to do all the book keeping can drive your profits down. However if you hire the services of a property company, you will be assured that your property will be managed efficiently and at a very low cost. What happens is that the property company charges a fixed rate on your rent collection. Hence if you are making over $10000 per month in rent collections, the property company might be charging you 3% of that which is $300 per month. Imagine how much you would be spending on a monthly basis if you managed the property all by alone. It would definitely be much more than that.

Bradford features complete information and facts, listings, and trustworthy expertise on property management Dallas. To learn a good deal more regarding all the commercial properties in the DFW metro-plex, drop by www.bradford.com and get in touch with one of the top specialists in Dallas commercial real estate.

Property Management - Checklist in Finding Your Property Managers

Managing rental properties like apartment, studio, condominium, townhouses or house and lot requires a lot of money, time and effort. It also needs near-constant availability to ensure that you meet the needs of your tenants. Property Management Company is the answer to many property owners and investors who are having a hard time managing their properties. This property management company is composed of professional people who are tasked to build a good relationship between the landlord and the tenant. Their duties include the collection of rent, responding to maintenance issues and repair damages of the property, evictions, and monthly financial reporting.

Not all property management companies are alike. Like any products or services in the market, there are hundreds of property management companies who are promising to offer a good service but only few deliver the best-in-class service. Thus, you have to be very critical in selecting the company to manage your properties. Below are some tips on how to find the company to trust in managing you properties:

1) Good Reputation. Reputation is an intangible and multifaceted concept, which takes time and experience to build. The company's reputation speaks a lot of its identity and the kind of service that it offers to its clients. A good property management company must be consistently professional, responsive and thorough. In addition, the company must be a licensed real estate broker and must have a team of experts to manage you properties. Pick the one who values your property.

2) Cost Efficient. Understanding financial statements, profit and loss, income taxes and budgeting are all very essential for the property manager. Expertise and competitive rental properties is necessary. The real estate property management company should work closely with the landlord in order to maximize rental income and return on investment for the property.

3.) MARKETING STRATEGIES- Good marketing strategies of a company can attract more potential tenants to lease your property. Effective competition in the market place necessitates more than just a word of mouth; it needs a solid marketing. Advertisements should be consistent and up-to-date. An effective marketing strategy can maximize occupancy and rental rates.

4.) Quick and Responsive- Quick and responsive communication are the solution to business development and service improvement. The skill to communicate effectively with customers and respond to their needs is essential because it only reflects how customers are valued. The property manager must then respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants' satisfaction as regards the property's amenities versus those of competing rental properties in the area. Services and communication must respond to the members' needs.

5.) Conflict Management Skills. Lastly, a quality property manager should be excellent in conflict management. Real estate matters are so sensitive; therefore, crucial situations are being dealt here. Knowledge of existing laws is important towards the implementation of the business policy to avoid unwanted outcomes. They should know how to deal with the complexities of running rental properties.