Property Management Services are an essential part of real estate investment. Property management involves the management and upkeep, or management and control of physical, real property, and its associated property assets. In simple terms, it is all about property investment and management. And what better way to understand how property management works than looking at it as a series of processes beginning with acquiring property and progressing through the various stages of maintenance and operation of that property – from acquisition to disposal.
Of course, this broad description of property management services by no means exhausts the possibilities and niches they can employ. However, such a comprehensive view helps provide a starting point for evaluating the level of service quality expected from a property management company. For example, are there experienced, well-trained, and cooperative property managers? Is the property management company able to provide a high-quality leasing agreement and rental contract for its tenants? Are those high-quality tenants likely to stay in the rental property?
These are but some of the fundamental questions to which a property manager must answer satisfactorily. Of course, the very nature of the transaction itself provides a degree of challenge to the property manager. For example, it may be that the property owner himself does not understand the complex nature of the rental property and the requirements of the rental agreement. It may be that the landlord himself is not even fully aware of the legal parameters governing the conduct of rental operations and leases.
At the same time, the property management services provided by a professional, experienced, landlord/tenant relationship planner and financial analyst will have an advantage over the services of a property manager in terms of providing financing resources to meet ongoing repair needs and operational expenses, as well as to provide emergency fund support in the event of property damage or loss. The property manager rarely has access to the sources of money typically required to meet unexpected costs and repair needs, especially in today’s unstable real estate market. In addition, most rental properties are sold by their landlords at market value, meaning that the former tenant is not receiving a deposit against the property that would typically be accepted should the property be repaired. The tenant retained the property as an outstanding investment. In such cases, the landlord/tenant must obtain financing in advance of any repairs being made to improve the property and bring it up to code in terms of operation and maintenance.
In some cases, it may be necessary for the property management services provider to finance repairs and make the required improvements before starting the rental operation. This would enable the landlord/tenant to receive his rental payments from the start, providing the necessary cash flow to ensure that the required repairs are made. All the required improvements are made before the beginning of the lease. In some cases, however, the tenant may prefer whether the expenses related to improvements are included in the rent he pays. The property manager will consider whether such a preference is in the tenant’s best interest and provide that preference when preparing the rental contract. Also, suppose any unexpected expenses must be addressed before the start of the rental operation. In that case, the property manager may discuss them with the tenant and find a mutually agreeable solution.
Many property management services providers use the services of a real estate broker. A real estate broker is an experienced, qualified, independent professional knowledgeable and experienced in the real estate industry. As a real estate broker who works directly with property managers and owners, he is typically well-versed in their experience. He can often provide cost-effective solutions that meet the needs of both the property owner and the manager/landlord. Most brokers will work only with reputable property managers and brokers, as they have developed a working relationship over many years. They will also review the requirements of each manager based upon the type of property and rental agreement.
Many property management services companies offer assistance to landlords and managers in completing legal paperwork. They will perform detailed documentation, such as property management agreements, lease documents, and tax records. They will ensure all legal documentation is current and up-to-date and address any legal or tax issues that may be of concern to the landlord/landlord.
There are various training programs offered by several respected property management services companies and organizations. A Property Management Professional (PMS) training program focuses on skills specific to property management services. Property Management Specialists (PMS) will learn the basics of leasing, budgeting, tenant relations, landlord/landlord relations, tenant screening, and evictions, maintaining inventory, landlord relations, tenant screening and evictions, tenant improvements and repairs, landlord relations, landlord insurance, and fraud and insurance-related crimes. Specific topics will include laws related to renters’ rights, fair housing laws, asbestos claims and lawsuits, landlord and tenant relations, fair treatment of employees, and more. As part of the PMS course, students will also learn how to hire and retain quality tenants. To obtain their Certified Property Management Specialist (CPM) certification, candidates must pass the CMP Exam based on the Real Estate Settlement Procedures Act (RESPA).