First things first, what exactly is a property management company?
The short and sweet answer to this is that they, the property management company is a third party responsible for the daily operations of your real estate investment. The responsibilities can vary depending on their rate and the agreed upon terms of the contract.
Property management companies have several different fields of expertise, one of these field are that of using a property management company for your rental purposes. This will generally include, finding tenants, gathering rent and general maintenance to your property.
Many owners however feel that they can manage their rental unit without the expense of a managing company, this might be the case for some well organised and ample time people. However if you live far and work long hours it is suggested that you spend the 5-10% commission and allow the professional to do the job right the first time.
There are 8 aspects to the rental responsibilities of a property management company.
1. Setting the rent
A property management company knows the area and the market of your property. As such they will be best incline to determine a manageable rent income.
2. Collecting the rent
It is your managing agents role to collect the rent income. If you have a difficult tenant it is also their responsibility to know what legal actions can be taken and when they need to be taken.
3. Finding Tenants
Your property management company knows what and where to advertise in order to find new tenants. Something most of us have no idea where to start.
4. Screening Tenants
It is your managing company’s responsibility to run a background and credit check on every tenant. It is through this method that they will try and ensure that they find the best tenant for your property, a tenant that will be trustworthy and pay their rent on time.
5. Handling Leases
Your property management company will most probably have a standard lease contract that they sign with all their tenants on behave of their clients. It is for this reason, knowing that the contract was drawn up professionally to protect themselves and you (as owner) that makes it worth their commission rate.
6. Handling Complaints
Another reason why they are worth their salt, your property management company will deal with all the complaints and emergencies, no questions asked.
7. Handling Move Outs
Your property management company will be responsible for going through the inspection list, checking for damages and fixing them, cleaning the unit and returning the deposit.
8. Dealing with Evictions.
It is your property managements company’s responsibility to deal with difficult tenants. This may vary from a small legal letter to actual evictions, depending on the breach of the lease agreement. It is on this very point that I decided to get an agent, simply because I don’t want to have to deal with the hassle of evictions, especially in South Africa.
We always think that we can do without a property management company, but the honest truth is most of us need them. I will rather work the hours its going to take me to manage my rental unit, and happily pay the rental commission, in order to enjoy my Sunday mornings.