Property management, called gestion immobiliere in French, is commonly known as the maintenance of personal property. The property includes almost all assets owned by an individual, but in this article we are mainly going to talk about real estate (houses etc.).
If you wish to invest in real estate, the most important partners in your team are property managers. Property managers do not only manage your property once you have bought it, but they also help you find the right property so that you can get a high ROI and enjoy the benefits of investing in real estate. They may charge you a subscription fee (monthly, yearly etc.) based on your portfolio or a one time fee if you are not a big client.
But why is property management so important and why should you spend money on property managers? Here are some reasons:
Marketing Service: They Tell You What To Do
Property owners are often new to a certain market and they are unaware of the typical rental rates charged for comparative properties in that specific market. You may end up quoting an amount that is lower than the average rate in the area, or a rate that is way too high. Both these cases are bad for you as letting your property go for too low means you’re losing money, and quoting an amount that is too high would make it difficult for you to find buyers.
Property managers have a better grasp of current market conditions and can answer all your financial queries. Following services are usually provided by property managers to make sure you earn more profits:
- Suggesting appropriate rent levels by providing analysis of comparative properties and rents in the market
- Advertising property through different media channels for tenants
- Arranging meetings with tenants and showing the property
- Taking care of the tenant selection process
Operational services include day-to-day maintenance of the property by property managers. A well-managed property with a clean ambience is highly valued. To manage the site properly and to keep it maintained, property managers offer following services:
- Interacting with maintenance companies to look after repairs and keep furnaces, elevators and other on-site machinery maintained.
- Making contracts with garbage collecting companies.
- Managing tenant complaints.
- Restoring the property after the tenants move and dealing with the contractors.
This can help you earn more because you do not have to worry about getting things done before you show the property to someone. Your property manager will take care of everything. Plus, a well maintained property also sells easily and at a higher price.
Property managers offer cash flow services depending on how the transaction is structured. These services mainly include:
- Collection of rents from tenants
- Payment of persisting expenses i.e. electricity bills
- Payment of profits to the investors or owners
- Paying certain taxes on behalf of the owner
You are not bound to subscribe to all services, even though it is suggested that you do so. It is always better to let professionals do the job.