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Home » Business And Finance Articles » Property Management The Good The Bad And The Ugly

Property Management: The Good the Bad and the Ugly

Being a landlord is not all it's cracked up to be. Think carefully of all the responsibilities that follow the purchase of an investment property for rental use. Screen your clients, run credit checks and, if you are both landlord and owner of the property, learn to deal with problems objectively, fairly and legally. Many clients will try to talk their way out of serious issues like late rent payments. Some will even present a dramatic sob story â€" be sure to stand firm and take care of your property the best way you know how. Any renter can and should be held accountable for rent they have agreed to pay. Tenants can be like children and will give you gray hairs. You may have to start coloring twice a month!

Make Sure You Have Time For DIY

Do-it-yourself (DIY) property management can be difficult if you have a career and a family. The responsibility of the landlord position can be incredibly time consuming. As the owner or manager of the property you will receive all tenant phone calls to report items that need to be fixed or complaints that need to be mentioned. Tenants can be very high maintenance. Be prepared for them to call often and for minor reasons. Also, take the time to complete quarterly checks every three months. Especially if you are a DIY property manager/owner, keeping an eye on the condition of the property is essential to maintaining your investment.

Ask Questions And Read The Fine Print

To find a property manager you must know what questions to ask. Write a list of the reasons you want to hire a property manager and be clear about what you will expect from the person or business that represents you. When you hire a property manager read the property management agreement thoroughly. Many property management agreements renew annually, unless you cancel the agreement sixty days in advance. Most property managers continue their management while tenants they have procured are still living on the property. The management agreement will hold in place until the tenant vacates regardless, of your desire to terminate the current relationship. Always, be fully aware of what kind of commitment you are making in these agreements.

Don't Let Management Companies Take Advantage Of You

If you decide to work with a property management company educate yourself about possible hidden fees that may be added to take advantage of less knowledgeable property owners. Extra fees like charges for acquiring work or cleaning estimates, procurement fees for finding new tenants and commission fees added to tenant sales are just a few examples of things to look for. Commission charges that are added to tenant sales are negotiable within the property management agreement. These types of concealed charges are typical in agreements created by larger companies that have a property management division. In general, the cost to hire a property management company should be a percentage of the monthly rent.

Tips To make Your Property Management Search More Successful

Always research and read your property management agreement from beginning to end. Don't sign anything until you feel comfortable. Take all the time you need to make a decision. Research and compare property managers. Ask them about their marketing strategy for the property. Find out how long the manager has been licensed and how many properties they have worked with. Ask for and contact references. The best property managers are found by referral through a trusted friend or business colleague.

Living By Example

As a property manager I try to exemplify the highest qualities in the business. I charge a percentage of the rent for my fee and promise not to add any hidden fees or undisclosed costs. I also require all potential tenants to allow me to do a credit check. I work to create the best situation for everyone involved. Since many rental properties eventually go up for sale, you are always building relationships with tenants who may be potential buyers. It is worth it to be smart, fair and reasonable in your property dealings.

And here is another random article you might be interested in...

How to Determine Your Equity Value

The term "equity value" is often used synonymously with the entire equity of a given home loan. When homeowners consider equity loans, the lender will consider the equity built in the home. If the home is not worth the amount applied for, the homeowner will pay higher rates of interest and mortgage payments. Thus, the equity if negative is considered a higher risk than positive equity. Still, the equity is factored by current market value, value of the home, and so forth to determine the risks.

Lenders put risk first often since large sums of cash are involved. First time buyers are offered various types of loans, but are often high-risk candidates simply because equity is non-existing until the closing is final. First time buyers searching for home loans will be rated by their credit history, employment, age, gender, the area considered to reside in, and so forth. If the buyer has excellent credit, this is a plus to the lender.

The lender will often help the borrower by finding adequate rates of interest and may even suggest a loan that would benefit the borrower moreso than other loans. Thus, when equity exists, this takes a bit of the load off the lender; however, if the home has "negative equity," then the lender is threatened.

Therefore, if the lender suggests that your home has negative equity, you may want to request a surveyor to test the homes value to confirm that the lender is realistic. The surveyor will help you to determine the equity on your home, and if negative equity exist due to a drop in market value, you may want to negotiate with the lender, however, if negative equity exists due to structural damage, mites, or other damage to the property, you may want to consider a different amount of loan to borrow.