Nowadays, property management companies are becoming popular because of hassle-free maintenance and saving time. Property management is the process of keeping watch over real estate, commercial, or individual property by a third party which is called property management company. This process of management often called real property management. When the management of property takes place in a systematic way or in a computerized system is called property management system. There are three types of property come across under management which includes residential, real state and commercial property management. The residential properties or rental properties may include accommodation for students, armed forces, tenants and individuals etc.; dwelling; land; garden etc. On the other hand, commercial properties may include road, land, building, hospital, hotels, public houses, cafes, restaurants, retail store, sports facilities, shops, shopping malls etc. The real estate property everything which is not personal or commercial property. It may be constructing a building, constructing a road, air rights, underground rights etc. This types of property are permanently bounded by legal rights.
What does a property management company do?
Hiring a company to manage property is not the ultimate decision. An inexperienced bad company may bring you an extra burden. It will increase your maintenance costs. A good company can relief your worriedness. This is why we are disclosing some idea about what does a property management company do. If you are planning to open a property management company, this article will give you some knowledge. A property management company is a third party who operates, controls and supervises the owner’s property. The owner hires this types of company to maintain day to day operating activities. Once the owner gives rights to a company, the company will bear all the maintenance cost. The management of the property may vary depending on the nature of the property. The company’s operating and maintenance activities may vary depending on terms and conditions when the agreement is made. Most often a property management acts like a lease agreement. Where a lessor is the owner of the property and lessee is a supervisor of the property. But a real property management company is not a leasing company.
A shopping mall owner decided to hire a company. The owner will get a monthly fixed rent of rental properties. All the worries and other activities will be assigned to the company’s shoulder. Here the company will collect rents, conduct marketing activities, handle maintenance, bear repairing cost etc. If a company remain balance after bearing costs and fixed rent to owner, they will make the profit. The owner and property management company should bind a contract considering possible income and possible incurring costs.
Property Management duties and responsibilities:
A good property management company will do the following activities:
- Collection Rent: The company has the right to set rent at a reasonable amount. They will consider market condition, location, competitor, facilities etc. while setting a rent amount. After setting up the rent amount, they will collect monthly or agreed a period of time. By the time passes, if adjustment needed the property management company may increase or decrease the rent setup.
- Tenant Management: To get suitable tenants, the company will conduct marketing activities. After getting an application, they will select the best tenants from the applicants. If any tenant makes fraudulent activities, it is the duty of the property manager to handle it.
- Property Maintenance: It is the duty for the company to maintain day to day activities. It includes record keeping, safety measurement, comfortability measurement etc.
- Repairment of property: If any issue arises regarding property conditions, the property manager should identify the reason and immediately fix it. Sometimes parts of the property become obsolete, the company will take the necessary step to make that useable.
- Property Supervision: The company will supervise their employees, security staffs for smoothly running the business. They will always take initiative before becoming vacant position.
- Budgeting and Control: The property manager will estimate month maintenance costs and periodical replacement of assets. It will help the company to reduce cost and make a higher margin.
- Tax responsibility: A property management company will responsible for indulging tax-related activities.
What does a property management company charge?
The charges of the company vary depending on the nature of the property, location of the property, and the availability of tenants. Generally, a property management company charge a flat rate of monthly rents. The rate may be 9%- 13% of the rent received by the company. Sometimes, they charge a flat amount regardless considering percentage amount.
Does the property management company need a license?
The license activities depend on countries rule and regulation. If any country does not require a license, a company can operate a business without taking a license. In California, real estate license code needs to operate a business in that area. Most of the property management activities are performed under the license of the country. There is a separate code of license included in the law of the country. Schorr Low handles different property management issues in California.
List of popular property management companies
- USA Real Estate and Property Management
- USA Real Estate & Property Management
- Shelcon Properties Pvt. Ltd.
- Ray White Property Management
- Brickleys Property Solutions
- American Property Management
- Association Services of Florida
- IRM Investments, Real Estate & Management – USA
- Plaza Management USA Inc
- Branson USA Realty LLC
What are the benefits of using a property management company?
There are several benefits offered by this types of company. Choosing a good company is important to get those benefits. Some benefits are given below:
- Investment outcome: Hiring a good property management company will maximize your investment income. They will provide you lump sum return by managing tenants and occupancy of your property.
- Quality Tenants: This types of a company take responsibility of fill vacancy of your rental property. They conduct the necessary marketing activities to select high-quality tenants.
- Mitigate Legal issues: The company performs all activities related to tenant screening, safety measurement, inspection, rent collection and advance deposit from tenants. If any problem arises due to those activities, the company solves immediately to maintain customer retention rate.
- Vacancy Fill-up: A rental property management company relief you from vacation uncertainty. The company takes necessary steps in this regards. They will reduce vacancy duration by performing rapid marketing activities.
- Rent Collection: This types of a company takes the burden of collecting rents from tenants. They use a systematic process to collect rents. They create certain rules and regulation to collect rents. Hence, the collection of rent become tighter.
- Tax resolution: This company helps you to understand taxable income. Also, assist you to find out deductible tax items.
When you need a property management company?
If the owner has enough time and he/she understand the management process, there no need to hire a property management company. On the contrary, you may need a company’s help. The below situation may encourage you to hire a company-
- Limitation of time: If the owner remains busy all the time, he/she may need a property management company to oversee rental properties.
- Various Property Units: If the unit of commercial property has lots of units, a property manager needs to take over duties and responsibilities.
- Remote Property: When the owner lives in a distance from the property, it becomes difficult to manage the property. Here the company acts as a supervisor of the owner.
- Lack of interest: If the owner has a lack of interest to maintain the property, a company can play a vital role for management.
- Affordability of cost: a sum of amount needs to main the property, the property manager can bear those cost.
- Employer Management: Sometimes an owner hires an own manager. If that manager fails to interact will tenants. A property management company becomes essential in that situation.
- Management Ability: Sometimes an owner doesn’t have the knowledge to maintain a property, a property management required to assist management activities.
A good property management company should have the following qualities:
- The company should have a good management team.
- They should have enough experience to handle uncertainties.
- The company is required a good brand value.
- The company should have skilled staffs.
- A company needs to manage recommendation from previous clients.
- A real property management company may have the license from the regulatory authority.
- A good company needs to have a work portfolio etc.
To hire a property management company is one of the biggest decision to gain success. We recommend hiring a real property management company which adds value to your property. Getting a company associated with higher cost. If you have a small property and you have enough time and knowledge about it, you should manage it your own. It will relieve you from property management costs. In case of lots of residential property, commercial property, and real estate property, hiring a good company will make you a profitable property owner. Sometimes property owner can’t capture suitable tenants. The owner receives a lower amount of rent whereas a company can bring high-value tenants. In that case, hiring a commercial property management company is a good decision for you.