Real Estate Management is the legal operation, administration, and supervision of an individual or entity’s physical property and real estate. This broader term encompasses many activities related to property conducted by individuals or entities, including leasing, purchasing, selling, managing, and planning.
If you own rental property, you need to manage your property to rent the units effortlessly. Without proper tenant care, you may be facing possible legal action as well as financial loss. A real estate management company can help you oversee the day-to-day operations of your rental property and be a partner in protecting your investment. The following are some of the services offered by a real estate management company.
Designations of Principals: When you hire a real estate management company, one of the first things they will do is create a master plan, including daily operations on a daily basis. This includes but is not limited to, designations of managers, property managers, and property owners. Principals are the individuals who manage the daily operations of the property. In most states, you are required to designate a manager or owner before you can register a deed of trust or any ownership change with the county. Property managers are responsible for collecting rents, security deposits, collecting mortgage payments from tenants, hiring tenants, collecting rents and escrow, paying taxes and insurance premiums, and overseeing the day-to-day upkeep of the property.
Training and Continuing Education: Real estate investment can be tricky, so you will need to know the laws and regulations that apply to your state and local area. You should also know the policies of your local real estate management association. Property management companies will often provide training seminars and workshops to help property managers retain their certification and maintain current licensing status. They may require ongoing training and education as well. These seminars and workshops may focus on tenant obligations and lease agreements, management policies and best practices, budgeting and management effectiveness, problem solving, marketing and promotion, selling the property, and more.
Best Practices: Real estate property management companies are focused on meeting the needs of their clients, so it is important to ask what their best practices are. Do they work closely with the management companies and associations of commercial properties in their service? Are they working to minimize risks associated with investing in real estate? What are their processes for collecting rent and late fees? How do they make sure that they help minimize these common problems?
Cash Flow: Does the real estate management company allow you to set up cash flow so that you have at least some control over cash-flow issues in your rental property? If not, it may be time to change companies. Real estate investors must know how to manage money in order to have any success. Your professional real estate broker can usually help you understand the importance of having cash flow, especially for investment properties.
Leasing: Are the rental property management services that you are considering doing require you to sign a long-term lease? If not, then this may be a sign that they don’t offer a lucrative leasing program. The best way to find out is to ask if they do and if so, how much of a leasing program do they offer.
Outsourcing: You may wonder if real estate property management services include outsourcing their work to another company or individual. Real estate managers are usually very busy with several different tasks and trying to outsource certain aspects of their rental care will simply not be cost effective for them. You want a property manager who is able to focus on all the aspects of the rental business. You also want someone who has the tools to handle multiple tenants and landlords. You want someone who knows how to fill out application forms quickly and who is able to help tenants schedule payments on a weekly basis.