Property management is the practice of operating, caring for, controlling, and overseeing real estate, personal property, tools, and equipment. This practice is compulsory for property owners in some jurisdictions. Even if it is not compulsory, it is still suitable for large property portfolios owing to the need for professional services.
In the discussions that follow, the subject matter of how property management works is going to be explained in details. This is going to be actualized by examining the major roles of a typical property management company.
HOW PROPERTY MANAGEMENT WORKS:
• Sourcing for Tenants
This is the process of finding tenants to occupy the vacant premises. This is mainly done by actively advertising vacant homes to would-be tenants. It also entails thorough background checks of the would-be tenants, filling of the various forms, and agreeing on the terms of payment. This service aids the new tenants to get started in the new premises too.
• Financial Management
It is the efficient management of the money or funds that are involved in a rental service provision. Under this service consideration, property managers collect rentals from the tenants, deposit them in trust or escrow account, and furnish the landlords with periodic statements. It also involves dissemination of any increase or decrease in rental prices to the tenants as well as the issuance of receipts.
• Dispute Settlements
Disputes are naturally bound to arise between the tenants and the property owners. Property management companies also settle such disputes if and when they arise. This way, landlords or property owners are spared of unnecessary inconveniences and are granted the leeway to focus on other tasks that matter.
• Property Maintenance
Any piece of property will usually experience a breakdown, dilapidation, or faults from time to time. Property management also involves the inspection, repairs, and maintenance of the rental property. They do so by hiring the right contractors and adopting a proactive approach to the inspection and maintenance of the rental property.
Under some extreme circumstances, tenants may often have to be evicted from the homes or facilities they rent. It is the duties of property managers to ascertain whether an eviction is necessary, plan, inform the property owners, and execute it altogether.
Most landlords usually require their incoming tenants to furnish them with recommendation letters from their previous landlords. This is to ascertain their ability to pay the rental fees in time and any other issue that may impact their tenancy. Property management also incorporates the issuance of such referrals to the future landlords of previous tenants upon their exit from the premises.
• Compliance with Statutory Obligations
Different jurisdictions do impose unique requirements and codes to govern real estate property that lie within them. Property management also entails the familiarization with and enforcement of these codes. Property managers are better suited for such functions due to their possession of the required skills and manpower.
Occasionally, disputes between the tenants and landlords may spill over to the courts. Property managers may either institute or participate actively in such litigations if and when they happen. They also advise the property owners of the best courses of actions to take whenever such issues do arise.
As may be clearly deduced from the foregoing discussions, property management is clearly not a do-it-yourself undertaking. This is because it is not only intricate but also requires licensure besides possessing a great deal of technical expertise. Additionally, property owners may need to pay minimal attention to their business and focus on the core tasks that matter to them. The intervention of a qualified property management company is therefore by all means inevitable.