Property Management: Important Factors To Consider Before Choosing A Manager.
INTRODUCTION
The increase in demand of housing and accommodation in urban areas and the consequential profitability of the real estate sector has made landlords of many in recent times. A direct result is that there now exist property owners who are ready to reap the profits of their investment through rent and at the same time, possess little or no knowledge of property management. For others, the time required to self-manage property is a tedious task they would rather delegate to another; thus the need for professionals who will handle these tasks, thus necessitating the need for property managers.
Property management is this, the personal attendance of an individual or company to the managerial and financial oversight of real/immovable property. This can be land, buildings or estates. The relationship between a property manager and the property owner can be described as an agency relationship. This means that the manager acts on behalf of the owner, in overseeing certain aspects of the property, delegated to the control of the manager in the contractual relationship. Depending on the budget and needs of a property owner, the services of a self employed manager or a property management company can be procured. However some important factors to be considered before choosing the perfect property manager, regardless of budget, will be highlighted below.
Rental Value of the Property: While rent might be considered the most determining factor in accommodation decisions, it is also an important factor to be considered by the property owner. The duty of a property owner in this case can include; determining the accurate rent price of the property. This is done by considering some factors such as the location of the property, the amenities and facilities in the property, average cost of rent in areas surrounding the property, real estate market data and other. For instance,where a landlord intends to rent property for a certain sum, a property manager will factor in the above mentioned parameters and properly advise his client on the advantages or disadvantages of renting out the property at such an amount.
The Type Of Property To Be Managed: Some property managers specialize in managing commercial properties while others effectively manage residential properties. It is thus essential for the property owner to consider the kind of property to be rented as well as the specialty of a property manager before hiring one. It is also important for the property owner to decide whether the manager will control either the internal or external areas or the private or common areas of the property jointly shared by other tenants.
Management Portfolio of the Property Manager: This point is related to the above point. It is the duty of the property manager to further request for the portfolios of prospective managers. It is Important to check the state of the property, maintenance quality of the facilities and surroundings and the general outlook of property. This is important to ensure that the property owner has a general idea of how his property will be managed.
Legal Requirement Of The Locality: it is necessary that the property manager is conversant with the tenancy laws of the state in determining lease requirements, tenancy qualifications and duties, duties of the property owner, eviction requirements and other necessary factors that will ensure that the property owner is in compliance with the law and enjoys maximum returns on property investment.
Extent Of Management Responsibility: This is essential to determine the extent of control to be placed in the property manager by the owner. The owner ought to decide whether the manager will be totally in control of all aspects of the property including carrying out repairs, collection of rent, renting out property, payment of tax or levies on property or whether he will only control some aspects of the property.
Liability: As a property owner, you must realise that the property acts on your behalf. All his actions bind you as his principal. You are therefore to draw up a liability scale or better still have a properly defined role that the manager is expected to fulfil. Where he does not agree to it, you should rather not transact with him.
SUMMARY:
It is important to know the value of your property before giving it out. This will help you to be more diligent in selecting your manager in order to avoid losses. It is also important to know the extent to which you want to exercise control even when the property has been given out to a manager. All of these will influence your choice.
For further insight see our series of articles on;
PROPERTY MANAGEMENT: LEADERSHIP STYLES AVAILABLE TO YOU.
PROPERTY MANAGEMENT: MANAGEMENT STRUCTURE FOR PROPERTY MANAGERS.
PROPERTY MANAGEMENT: PROBLEMS AND TIPS TO AVOID THEM.
You can also read our article on;
PROPERTY TRANSACTIONS: REMEDIES AVAILABLE TO PARTIES WHERE THERE IS BREACH OF CONTRACT.