The Importance of Property Management to Real Estate Investment
You can attain a reasonable level of financial stability when you consider robust investment options, of which real estate is one. Real estate investments provide a wide range of investment opportunities and could be a real money spinner. It involves the purchase, ownership, management, rental and/or sale of real estate for profit. Real estate investors in Burbank are interested in investing in property with high leverage, and a great deal of overdue maintenance. They purchase investment property (for instance, a single family home or a duplex) for a simple and actual goal: cash flow. However, cash flow may or may not become a reality, depending on the size of down payment and the condition of the real estate property.
Therefore, if investing and succeeding in real estate investment remains your huge consideration and top priority, or you are one of those investors with limited time to dedicate to your real estate investment, a good property management company is the best for you. Property Management transcends providing an apartment for an individual or a family investor. It should not cost you money, but rather fetch you money. However, this is only when you know how to ply your route. Property Management Company has a property manager in charge. The property manager is a third-party service provider with the sole business of taking care of properties in exchange for a monthly fee. Just as one would expect, property managers provide a wide range of services to property owners (landlords, owners of residential, industrial or commercial property, etc.)
Aside providing shelter to the tools and materials that are used for a housing unit, a good property manager should be able to manage people, who constitute customers. They are the individuals who would keep your building afloat. A good manager knows who needs to be rented your unit by running credit checks, and confirming income and previous residence.
When successful real estate investors are ready to acquire a building apartment, they would usually bring their property manager along for one of the good inspections before signing any deal. Oftentimes, the real estate investor fails to notice certain loopholes in any property acquisition dealings, which an experienced property manager would identify just at a glance. However, it is not the responsibility of a good property manager to dissuade a real estate investor from making a purchase, but to assist the purchaser see the package in its entirety.
Roles of a good Property Manager
Operation of the Property
Operation of the property concerns the day-to-day management of the property as a business. This responsibility includes dealing with tenant complaints, dealing with contractors and checking restoration of the property after a tenant moves out, and dealing with tenant evictions and miscellaneous lawsuits, etc.
Provision of Marketing Services
These include provision of rent analysis of comparative properties and suggesting appropriate rent levels; advertising for tenants in various media (newspaper, online, etc.); meeting with potential tenants and showing the property, and carrying out credit checks and managing the tenant selection process.
Oftentimes, property owners may not possess full knowledge on the typical rental rates charged for some properties in a certain market condition. Owing to the fact that property managers work with many different clients at different locations, they often have a better grasp of current market conditions in the specific market than the typical investor.
Cash Flow Services
Depending on the structure of the transaction, a property manager deals in collection of rents; payment of recurring expenses (e.g., for electricity, water, etc.); payment of contingent expenses (e.g. for repairs etc.); payment of certain taxes on behalf of the owner; payment of installments to lenders; and payment of profits to properties owners.
Property Management tips for landlords and property investors
Property Management is a consideration for any property investor and therefore needs to be taken seriously. Ignorance of any procedures in property acquisition might cause a great damage which will require a huge cost to fix.
Investors – Limit your property search to the areas surrounding where you live for ease of management.
Landlords – Engage the services of a professional property manager. This will eradicate all the hassles that might arise in managing your investment property, thereby making you get the most out of your investment.
In sum, property managers are an important resource, since they play a key role in keeping the property tenanted up, while also maintaining and enhancing profitability for the owner.
