Property Management for Newbies

The Reluctant Property Manager Club

So you bought your property and now you cant sell. Welcome to the reluctant property manager club. Many owners have little experience with management and like it even less. Its your small business and running it does take your time. If your not a good businessperson your property can become your burden. If your are not super good with your landlord tenant relationship you can find yourself in court.

In a down market housing is very illiquid. If you are retiring and want to be closer to family or relocating for work, you may find yourself a reluctant long distance landlord. This is definitely not a good thing, dont try this at home.

Time to shop for a good property management company.
When you hire a property management firm, you are signing off and binding the manager to act in your behalf and in your best interest regarding the management of the property. Thats agency

Some important DD
In order to be sure that your new management copmpany can do a good job and has a good track record you should do some homework.

1. Require the company a current real estate license. Go to your State Dept.of Real Estate to see if it is current and that there have not been any complaints or suspensions or revocations of the real estate license.
2. Check with the Better Business Bureau
3. Be sure that the contract can be voided, without having to provide reason and without penalty with a written 30 day notice to terminate the arrangement. Be sure that your written termination date matches the hire date or you may have a deduction for early termination

Duties and Responsibilities of Managers

Property management companies often have their own handyman and you should be very clear about how this works. If a light bulb is out and the handyman has to travel back and forth and change the bulbs, there is likely a minimum one hour charge. It could cost you $45.00 to change a light bulb.

1. Require all major repairs be completed with three independent bids and receipts to back up the billing charges.
2. To protect yourself, you should establish limits on how much can be spent without having to get your approval. If the bids all seem high, we think you should have the right to bid it out yourself.
3. The management company should provide annual inspections and a written report.
4. The property management company must provide a 24 by 7 response team and there should be no extra charge for this. Its part of the basic management of a property.

There is much more to consider. Its important to understand how they qualify new tenants. There should be strict guidelines about tenant credit and ability to pay and the financial reporting responsibilities is the only way to lift the fog of the income and expense statement.

Thanks for Reading
Howard Bell
yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.Your Property PathSF

http://yourpropertypath.blogspot.com/