An Introduction To Property Management
If you’re interested in running a property management company and have not yet had an introduction to property management, you run the risk of immediate failure. Property management is not a process that can be learned overnight but it is a business where things can quickly go wrong if you don’t see the warning signs. Managing property can relate to residential, commercial or industrial real estate. Your company is responsible for the upkeep of the property including repairs, rent collection and other issues that arise when dealing with real estate.
One of the first tests of any property management company is their ability to deal with vacant properties. Your clients expect their property to be occupied at all times and will not tolerate a company that allows their real estate to be empty. Unoccupied property is costing them money and they certainly don’t want to waste more cash on an organization that doesn’t deliver. You need to have effective marketing strategies to survive. While advertising via local newspaper is fine, you need to go online to heighten the property’s visibility and increase the chance of finding a suitable tenant.
Your main role is to act as a liaison between the tenant(s) and landlord. You must also perform credit checks on all prospective tenants. A property management company needs to collect the rent from the tenant on behalf of the landlord. If a tenant refuses to pay the rent, it’s the property management company’s duty to initiate legal proceedings if necessary. This will involve hiring a legal team who can fully understand the nuances of any tenant/landlord dispute. You must also collect and hold a tenant’s deposit and decide if any damage has occurred. If it has, you must take the cost of repairs from this deposit.
As well as serving the landlord, a property management company also needs to see to the tenant’s needs. This includes repairing any damage that has occurred in the home during the tenant’s stay which is not his fault. Examples of this include bad plumbing, mold on ceilings/walls and issues with electrical sockets. Because of this necessity, property management companies need to have access to trusted tradesmen. If a heater breaks during winter, the company must find someone to fix it as soon as possible. Tenants have certain rights which must be adhered to or else you may have legal action taken against you. All tenants have the right to a well-maintained home which you must provide.
You can’t become involved in property management unless your company has the requisite license as a real estate broker. In the majority of states, a property manager who is involved in rent collection, lease negotiation or property listing must be either a licensed real estate broker or a licensed real estate salesperson who works under a licensed broker. Companies who don’t meet this criteria will be heavily punished and shut down.
This is just an introduction to property management and as you can see, it has the potential to be a complicated process. Nonetheless, a successful company is also an extremely wealthy one.
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