Having several properties, or even one should call for utmost supervision and intelligent management. Considering the plethora of benefits that can be obtained from a professional property management firm, it is ideal to allow them to handle the crucial day-to-day activities needed to manage your assets efficiently.
This essential but wise financial decision is worth all the time and energy, particularly when you bag a professional and credible management company. It should be noted that most of the investors had made regular yearly calls to several management companies, but things never worked out with laying their hands on a proficient one, this is to tell you that an outstanding property management firm can be scarce, just like other useful things.
Entrusting your property in the hands of a property management company provides you with an enormous help with running your property and ensuring every aspect of your investment runs smoothly, and that includes your residence and tenants.
In hiring a property management company, the property agreement you will sign with the company should be paid strict attention. More importantly, concerning the layout of your property, there is some necessary information that should be included in the agreement with the property management company.
Most investors should acquaint themselves with a property manager that is of the same interest as themselves when it comes to running the asset. More so, there are chances that investors may be having a long-term relationship with the potential manager, so it is a good idea to find who they like and respect.
Duties Performed by Management
There are many primary duties and responsibilities of top property management companies, and there are some added ones that the owners mandate them to do. These roles are under-listed, and must be carried out effectively to make sure the investment runs smoothly:
- Management of Tenants
Taking care of tenants’ needs and requests is a core task of a property manager. After screening applicants, to seed out the desired ones from the lot and all agreements thrashed out, the next step is to see to their requests, complaints, maintenance, move-outs, and eviction. This eviction must be authenticated by property owners. This management of the tenant process makes a proper man and property management.
- Maintenance and Repair
Periodic maintenance and emergency repair is another core role of a property management company. They work well to make your property safe, inhabitable condition, and working in top condition for a long time. They inspect the property regularly to spot weak links that need to be plugged to keep the property running in top-level.
Wears and tears of the property are well maintained, thanks to their extensive network of reliable contractors to check the potential cost. This maintenance and repair are to keep the current tenants happy and also attract new ones, and this ultimately shortens the duration of vacancy, which most owners don’t want to have at all.
- Supervision Task
Property management is not limited to only tenants; it also has something to do with other employees that will be paid to bid their services in property security. The property management company is tasked to make sure these extra bodies on the property do their jobs rightly. Also, they see to the remuneration for the services rendered, and can even fire them if they fail to be lagging at their job.
More so, property landlords diversely go about the property management. They look around the vacant properties to record the degree of wears and tears, any traces of wreckage or vandalism, and perform routine maintenance.
- Monthly Statements
Properties shouldn’t be managed blindly and casually, but instead handled professionally. This is the more reason why it is advisable to hire a professional property management company to run your investment adequately. At the same time, you divert your attention somewhere else, which is not to say you should be oblivious of the critical part of everything that happens to and on your property.
Therefore, a credible management firm provides you with a monthly statement of cash inflows and outflows. Every manager wants to see what the expenditures are and how much he is making as a revenue. This monthly statement provides a basis on which to know the livelihood of your investment.
What is the Property Management Agreement?
A property management agreement is a dated contract between a property owner and a property management company, a manager, or landlord of the property, and it covers all the above critical tasks of a good manager. This agreement does more than just stating the duties of the property manager; it also covers the legal liabilities.
This dated agreement is signed by the property owner and the management manager, and it serves as a guide to how the property should be operated and the basis for the settlement of future disputes. However, the agreement will highlight the critical issues that must be sorted before the property management company accepts responsibility for the property.
A well-drafted contract should feature the insurance option that covers the property. Both parties must be cleared on what should be included in the contract. In most cases, a verbal agreement is, as to what the duties and responsibilities of the management company should be, not necessarily a penned one; no one tells a professional company what to do, but this property management agreement supersedes anything agreed verbally.
What are the Basics of a Property Management Agreement?
When hiring the services of a property management company, you need to have a full grasp of their duties and responsibilities. Also, make sure the contract is prepared in such a way that you are protected should the property manager choose not to fulfill their obligations. The agreement must include the following:
- Service and Fees
Understanding the services that will be provided by the property management company, how much it will cost, what services can be performed for an additional fee, and what services cannot be performed under any circumstances, is the first part of the dated agreement that must be taken care of. You just don’t want to go into an agreement without the full knowledge of the critical information.
Most of these property managers charge a relatively higher price, and so shouldn’t be written off because they do so. The reason is that most of the managers that charge lower fees may later change their rates for additional services like filling vacancies, tenant eviction, if necessary, and maintenance.
These extra responsibilities must be discussed at length to know how the rates will be charges, flat rates, a percentage thing, or will be determined by task. All these must be understood closely so that no property many would catch you unawares with fresh demands you failed to income in the agreement you both attested your signature.
- Responsibilities Over the Property
Of course, there is a genuine reason for wanting to hire a property management company, which is to take some duties over your property. These responsibilities stretch from screening tenants, filling up vacancies, maintenance of the property, to attending to emergencies. It would be a dumb thing not to include these must-do responsibilities.
Liability and indemnification is a critical part of the dated agreement that covers the legal liability with respect to your property. This is a clause that should tell the property management company’s liability in situations of dealing with potential injuries and personal claims against the property.
- Contract Length
You may want to give the property management company some opportunity to prove their worth, therefore providing a short-term clause until you can have trust and confidence in their work. Nobody wants a liability to take care of their property; we all want a tested and trusted candidate. It is no good news that most property management companies won’t sign a contract that is less than a year; this is where the termination clause sets in.
- Termination Clause
Judging by the fact that most property management companies won’t sign an agreement for less than a year with you, it would be very wise to review your termination clause carefully. This means that you would be able to terminate the contract once not satisfied with the outputs. Inadequate revenue and low-quality of work may be one of the reasons to terminate the contract. Being able to terminate an agreement is an absolute right; you get to control the work done by the property manager.
It doesn’t matter if you own a property or planning on becoming a property manager yourself, having a well-written property management contract is a necessity. It must embody the essential responsibilities and fees that would be charged for these tasks. This agreement gives you an ease of mind that all your financial and legal liabilities are covered, that’s some assurance!
Read all the must-do responsibilities of a property management company, understand the basic things that you must include in your agreement, to make it standard, then confidently go on ahead to hire a manager to watch over your property.