UGANDA, Kampala | Real Muloodi News | Hiring a property manager to operate a real estate property for a fee is the way to go when the owner is not interested in running the day-to-day activities of his or her rental property.
Most commercial properties run by property managers are apartment complexes, rental malls, and business offices. They also manage residential properties. Usually, the cost of employing a property manager is tax-deductible against the income generated from the property.
Property managers offer an ideal solution for investors who do not live near their rental properties or don’t enjoy dealing with tenants and dealing other obligations concerning their rental properties. Many real estate investors do not wish to be hands-on about the investment, particularly institutional real estate investors.
Employing a property management company works wonders if you have many properties or rental units. The more rental properties you own, the more likely you will benefit from a management company.
In most cases, the property manager will charge the landlord a flat fee or a percentage of the rent. And for a fully managed service, they will usually charge between 10-15% of the rent, which they will take on a monthly basis. This allows the landlord greater freedom, and there are fewer legal issues.
Responsibilities of a Property Manager
The property manager is charged with the responsibility of supervising and coordinating building maintenance and work orders, doing menial repairs and cleaning work, resolving tenants’ concerns and complaints, advertising, showing and leasing vacant units, collecting rent, depositing the income, adjusting rental prices with your approval, and communicating regularly with the property owner on the status of the property.
The property manager is the owner’s eyes and ears, ensuring that issues are dealt with promptly and the property itself is cared for professionally. The manager deals with landlord-tenant laws, property records, accounting, taxes, screening and approving tenants.
What to Look for in a Property Manager
1. Experience with Your Property Type
The company or professional that you hire should have experience with the type of property you own. Managing commercial properties and tenants is quite different than residential properties and tenants. Retail will have different nuances than office space. Look for a property manager that has specific experience with your property type, so they can anticipate any challenges and identify value-add opportunities, thanks to their knowledge of rent and expense benchmarks for your property type.
2. Availability and Responsiveness
You hire a property manager because you don’t want to be awoken at 2 a.m. by a tenant with a broken toilet. Therefore look for a property manager that is quipped to handle calls 24/7. Does the property manager answer your calls quickly? That should give you an indication if they can dedicate the time to making sure your property is being cared for and your tenants are happy, saving you precious time and preserving your investment.
3. Ability to Communicate
Communication and people skills is the number one thing to look for in anyone representing your interest in a business or property.
4. Their Tenant Screening Process
The best property managers are ones who thoroughly screen tenants. As them how they conduct background and reference checks, and how they check that potential tenants are financially sound. Look for property managers who are professional, reputable and well-established, and know how to keep both the landlord and tenants happy.
5. How are Repairs Handled?
You want to be notified of every repair. Many companies have a maintenance threshold, meaning repairs under a certain agreed amount can proceed without your specified approval. However, they will still notify you of the repair.
Maintenance is an area that differentiates an expert property manager from a property messenger. A messenger will simply relay information and ask you what to do. Whereas an expert manager will inform you of the problem, and make a recommendation and a plan. You will be able to trust their advice and let them proceed how they see fit.
Ask if they provide photos of the damage and the repair. You want to be able to see what is going on in your property.
6. Do They Inspect the Property Regularly?
Your property manager should do an on-site inspection of the property at least once a year. This general inspection will identify if there is any considerable damage or issues in the property. The property manager should provide you with a report after the inspection with photos.
7: Are They Experts in the Industry?
Good property managers will be knowledgeable about property management, their company stats, and the local market. They should be able to provide you with information on the following statistics:
- Average length of tenancy
- Days on market
- Average rent range for different neighborhoods
- Average cost to make the average home rent-ready
- Number of leases signed per month
- Vacancy rate
5. Billing Transparency
On top of the set rate to manage your property, it is important to know the company’s policies for other charges, such as maintenance, advertising and other activities. Understanding upfront how they charge will alleviate common misunderstandings later.
Pros of Hiring a Property Manager
The most obvious advantage of hiring a property manager is that it removes the need for the owner to be nearby and actively managing the property. This allows the real estate investor to focus on investing in more quality properties rather than addressing the portfolio of properties currently owned. The cost concern is what real estate investors need to get over if they intend to scale up their holdings.
The Downside of Hiring a Property Manager
The level of attention and service a property manager can give the tenants, who are the ultimate source of income, may not be the same as how the landlord would do it.
In Uganda, the property industry is not regulated, and property managers do not have professional licenses. However, consider this check list during the hiring process:
(i) References: Ask for references and make inquires with the company’s current clients or former clients. Find out the work ethics and integrity of the company or individual you intend to hire.
(ii) Financial and Accounting Acumen: Your property management professional should have a solid understanding of financial statements and accounting. Since you will task the manager with handling finances, it is paramount to find out how they manage finances by looking at the systems they have in place.
(iii) Online Reputation Check: You’ll want to check their online reputation on Google and social media. Don’t consider any companies with less than 4 stars. Having 4 or more stars shows that the company is committed to excellence and they care about their customers’ experience. You want a company that cares about their reputation.
Hiring a property manager is the safest way to avoid the daily hassles involved with rental property.
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