Professional Property Management

Knowing how to manage your rental property is essential if you are renting and doing it all by yourself. You have a property and are letting it out to strangers. How do you manage everything connected with being a landlord from the insurance, maintenance and collecting rent to damage, unruly tenants and non-payment?

It’s not easy, but can be made a lot easier if you know what to do – what you can do and what you cannot do. Once the rental agreement has been signed, you are now on a formal footing with your tenants, where they are relatives, friends or strangers, and the relationship must be maintained as a formal relationship.

You will find that most tenants are easy to get along with and generally maintain their rental payments, but you will come across those that are awkward and may take up a great deal of your time – if you let them. All landlords and property managers can learn more about managing their rented real estate, and here are some suggestions on how to manage your rental property and also keep your hair where it should be.

Collecting and Keeping Track of Rent

You can arrange rent payments either the traditional way, of knocking on the door and collecting the cash, or electronically by direct debit or manual online payments. Much depends on what is suitable for your tenants, and you should discuss this with them before the rental agreement is signed. Once that agreement is signed and witnessed you are both bound by it, and you cannot enforce another payment method on your tenant. Some options are:

• Door collections
• Payment by check
• Direct debit from the tenant’s bank account
• Online payment by the tenant from his/her account to yours
• Online payment processor such as PayPal

It would benefit you to choose a standard method for all your tenants. Although rent collection at the door is the safest way for landlords to be sure of payment, it is very time-consuming, particularly if you have a large number of tenants. The problem with direct debit payments is that they are not paid unless the tenant’s bank account has sufficient credit: checks and other forms of bank payment are the same of course. Most people do not use PayPal unless they have an online business, in which case it might be their preferred method of payment.

Using Third Party Contractors

Using a third party to manage your rental property, such as property management firm, can take a lot of the work away from you and free up your time for more important work – such as finding new properties. If all you are seeking is a firm to look after rent collection for you, then you won’t have to budget for a full-service management service – nor will you have to worry about the payment method! The tenant pays the management firm who then pays you after deducting their fee.

If you do want a third party to manage everything connected with your rented properties, then this will cost more. You must also make sure that they offer the services you need. For example, in addition to rent collection, you might want the property maintenance and repairs taken off your hands, and for them to handle property damage, anti-social behavior and non-payment.

Make sure you use a reputable company with good references from other landlords in your area. Keep in mind that representatives of this firm might be the main contact your tenants have with you, and that they will therefore be representing you. It’s you who will get the bad name if they are undiplomatic in their approach.

Maintaining Records With Financial Rental Software

Keeping track of rent should be easy, but is frequently not, and a good financial package designed for this purpose will certainly help. You must maintain accurate records of rental payments for a number of reasons, including for tax purposes and to prove non-payment should you seek an eviction order.

In addition to maintain accurate records of payments and non-payments of rent, you must also keep records of purchases and other expenditure made in relation to the rented property. While a property management company can also do this for you, it is an expensive solution to what should be a simple task.

A simple rental software package designed for maintaining records relating to property rental will do most of the work for you – all you need do is enter the data. You could use this for expenditure you incurred personally, and then combine that with the financial report from your management company or you could go the whole way and look after it all yourself.

There are many options open to you, than, are to manually maintain your own records. Use software designed for the purpose or use a third party to collect your rent and maintain payment records. Alternatively, use a combination of each. Your chosen option may generally be dependent on how many properties you have, and whether or not maintaining rental properties is your business or just a sideline.

Whichever it is, choose wisely, because there are potential problems associated with each. Generally, however, responsible property management companies are good to work with and are effective at managing your rental properties. By outsourcing your property management you are free to focus your energy on tasks more suited to your expertise. Win-win all round.

All the processes that are applied to maximize returns on property by its effective administration are termed as property management. Property is the major investment of most of the organizations. Its management comprises of the rental policies and property rules that are applied in the area where it is situated.

Career in property management is becoming very popular these days. You can get employment directly under supervision of real estate owners or you can find your place in property management company. You can also get hired by any legal entity or property owner for a fixed period of time.

Property management companies play an important role of liaison between tenant and landlord. The duties of such companies consist of posing appropriate rent, responding and attending important repair issues, accepting rent, doing credit and background check of tenants and advertising vacancies for landlords.

In return of these services, these company charges lease commission and a fixed percentage of the monthly gross rent from the landlords.

Property managers not only handle income and expenses related to property but they also undertake activities like construction, repair and maintenance and development work. In fact, repair and maintenance is an important part of their work.

It is advisable to develop good relationships with property owners, tenants and property management companies for getting success. This relationship is based on basic understanding, mutual trust and confidence in each other. Landlords prefer managers who have alliance with tenants as it increases their profits and helps them in staying away from tenant constituency.

Other major aspects of this job is to participate in and/or initiate litigation with contractors, tenants and insurance agencies. Litigation is very important function that they undertake and sometimes, it is taken as an entirely separate job to be done by especially skilled attorneys. Generally, this work is performed by a person or a group of persons; however, it is not necessary for property managers to hire an attorney for the purpose. It is up to his skills how he handles this work.

It is very important for property managers to understand the Landlord/tenant law. He should be aware of the most common convictions, harassment, non-payment, public nuisance and reduction of pre-arranged services etc. They must be aware of all these legal things. It is therefore, advisable for them to keep up to date information about current laws along with new laws and practices that are prevalent in the localities where they are working.

Only top-notch property managers can achieve excellence in their respective field. To achieve best, you must have up to date knowledge about state laws and local ordinances. You must be ethical in your practices and in enforcing property laws as well as rental policies. Your paper work should be well organised and detailed. You must possess good computer skill and you should be good at communicating too. Be strong and committed to your duty and success will be yours in your respective field.

As a property investor seeking maximum rental and capital growth, you need to invest in property which is high in demand, yet also has limited supply. So what drives demand and supply in real estate?

When assessing property for potential investment, it is essential to pay attention to demographic and social changes that influence where people want to live and what kind of property they want to live in.

An example of social change is the lifestyle preferences of today’s Australians. Collectively we tend to view ourselves as more sophisticated than we did a couple of decades ago. The “I culture” is proving to be popular, as is the attraction to reside in locations near water. Investors would benefit from capitalising on these preferences by investing in property near “I” strips, close to rivers, beaches or harbours, and in inner city locations rather than rural locations.

Another factor which is responsible for driving demand is demographic trends. Many baby boomers have the view that the prosperity they have worked hard to create is for spending on lifestyle. As a result, many are trading their large suburban homes for smaller lifestyle-oriented properties located close to the ocean or near café strips. Many “generation X-ers” are also motivated by lifestyle – generally they are delaying marriage and family to allow themselves to achieve their goals. Single person households are also on the rise. These demographic phenomena point to smaller, lifestyle-oriented dwellings being in high demand over the coming years.

A rise in professional, dual income households with no children or fewer children later in life heralds an emerging group with money to spend on ensuring that they live close to good amenities, including transport, schools and the workplace. However, close proximity to transport and the workplace will become less important as the trend to work from home and spend less time at the office continues to grow.

When considering factors which drive demand, investors should ideally look for properties that appeal to both owner-occupiers and tenants. Bear in mind that these days, many of the features of a property that are valued by owner-occupiers are also sought by tenants. Bedroom size, a usable kitchen, storage, car parking, and other such features are just as highly valued by today’s tenants who will pay good rents for these features.

Most investors consider demand when assessing a potential investment, but fewer consider the supply side of the equation. Oversupply has the potential to jeopardise that important growth you are looking for when investing in property for the long-term.

Essentially, you should think about how easily your investment can be replicated by others, or in other words, how much competition your property will have. In any market, where there is high supply of a commodity (your property), potential consumers or users of that product enjoy more choice – therefore your ability to command a premium price is reduced.

Areas on the fringe of suburbia, with large tracts of undeveloped land nearby are a good example of this. It can be difficult to achieve a high price for a property in such an area when similar properties are readily available in new land subdivisions nearby. It would be better to have a property in an established area with high demand and little room for expansion. Similarly, high-demand areas that are “land-locked” by hills or bodies of water can limit future supply and put upwards pressure on prices.

It is also important to keep track of zoning regulations in the areas you are interested in investing. Residential zoning is used by local governments to regulate housing density. If a locality you are interested in is zoned to allow high-density apartments or townhouses, there may be too much supply, or potential supply of these types of dwellings to give your investment the growth potential you seek. It is very easy for others to build properties much the same as yours nearby.