Property Management Services
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A property owner should look for the following services being provided by a professional property manager:
TENANTS
Handle all dealings with tenants.
- Solicit new tenants from a network of agents and contacts throughout the area. Advertise with periodicals, signs, brochures, displays and print ads.
- Each rental application should be thoroughly screened, including credit histories, employment and checks with former landlords.
- A thorough orientation session with each tenant should be held to make sure they understand their specific obligations regarding the care of the rental property.
INCOME
Collect all rent on your behalf, and distribute funds on the tenth of each month.
- All rents should be due on the first of the month, and deposited into an Operating Trust Account.
- All rental and lease agreements should be prepared with established policies and regulations. Collection of initial rent and security deposits should be deposited in to a Trust Account.
- Late charges should be billed for any payment not received by the 5th of the month.
- Rent policies aggressively enforced.
- Late notices sent on the 5th of the month. Initiate and supervise eviction proceedings should the rent fall into arrears.
EXPENSES
Contract for, and pay all the property's regular expenses from an Operating Account on your behalf.
- Pay routine property expenses as directed by you. These may Include mortgage payments, property taxes, insurance and fees for gardening and lawn service, pool service, and homeowner associations.
- A good property management company earns volume-discounted prices on many expenses, and should pass these savings along to you.
COMMUNICATION
Owners should receive a detailed computer-generated report on the status of their real estate investment every month.
- Account statement copies of all invoices and any income distribution checks should be mailed promptly on the tenth of each month.
- Owner approval solicited prior to contracting major repairs or improvements preparation.
- Comprehensive monthly, quarterly and year-end financial statements useful for tax purposes.
MAINTENANCE
Your investment should be protected with conscientious routine maintenance and quick effective action in non-routine situations.
- When a tenant moves in, an extensive inventory and condition checklist must be completed to clearly document the property's condition. Your state law may even mandate a checklist for use at checkout time.
- Contract for and supervise all routine maintenance that you authorize.
- Make routine interior inspections, to confirm the property is being maintained and to determine if any repairs are necessary.
- A competent and experienced person must be available by telephone at all times and, in the event of an emergency, respond to situations quickly and effectively on your behalf.
INVESTMENT MANAGEMENT
Property management should go beyond maintenance and collections. As experts in real estate, a property manager should be able to recommend the best and most appropriate strategies for your property.
- Evaluate your property routinely and recommend specific repairs or refurbishment's to increase the rental or long-term value. Provide estimated costs and, when approved, supervise the work.
- Manage your property as a portfolio. Analyze improvements as an investment strategy, based on your financial objectives
- Monitor area prices and comparable rents to ensure that you receive top market rents.
- Experience overseeing apartment complexes and other types of investment income property.
- A good property manager maintains a high level of expertise by their affiliations, and by attending seminars and training classes designed to help them serve you better.
FEES AND OTHER COMPENSATION
Most state law requires real property managers to be state licensed and regulated real estate brokers.
Property managers handle and control large amounts of other peoples money. As a result, most states require that property managers be licensed real estate brokers who are educated, extensively regulated and who must maintain trust accounts on behalf of clients.
Federal and state anti-trust laws discourage real estate brokers from having fixed fees. Therefore, property owners should be able to negotiate a rate and service agreement specific to their situation.
However, our studies show that a property owner might expect to pay between 5% and 10% of collected rents, perhaps the first month's rent for new leases, some amount for lease renewals, and reasonable hourly rates for special services. Naturally, a small property owner with one or two single-family rental homes will likely pay higher fees than an apartment community containing hundreds of units.
Be sure to see our page titled Selecting a Property Manager
See also our sample Property Management Agreements on the Forms Web
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