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Posted: 2 months ago

PROPERTY MANAGEMENT BASICS EVERY MANAGER SHOULD KNOW - PART 2

This article is continued from a previous one with same title.
Please refer to the Part 1 before continuing here. View part 1 here: https://cowries.com.ng/BLOG_V.php?s=d414233ec7ccbb4f4426&h=1

(10) Prior Work Experience
Everyone wants to engage a property manager who has a track record of success. With such a wide range of responsibilities and talents, finding people that match the majority, if not all, of the requirements can be difficult. Property managers, on the other hand, come from a variety of backgrounds. Some started off as leasing assistants and worked their way up, while others came from customer service or building maintenance. Property managers can come from a wide range of backgrounds and have a lot of success.

(11) Leasing
What is the cost of a new tenant being placed in the property by the property management company? I've discovered that paying half a month's rent to a full month's rent is pretty common. Make a point of learning how the property manager advertises for tenants. A property manager who charges a smaller lease fee might not advertise as much or offer a co-op for other agents representing possible renters. Saving a few dollars on leasing could end up costing you more in vacancy if the property management takes longer to find a renter. It's also crucial to comprehend how the property manager selects applications. A property manager should, at the very least, be able to:

(12) Verify your earnings
Request a credit report (look for prior judgments, eviction history, credit history).
Conduct a criminal background investigation.
Have a clear debt-to-income ratio (ie. rent amount cannot represent more than 33 percent of tenants gross income).
Check rental references to learn more about the history of your rental.

(13) Fee for Management
For managing the property, all property managers charge a monthly percentage. This is normally between 8% and 10% of the gross monthly rent. The property management should be asked whether this fee is solely levied against real rent received or if it is charged monthly regardless of whether a tenant is present. It's also crucial to know what services are included by this management charge. Some of the fees listed below may be included in the management fee rather than being charged separately.

(14) Fee for Renewal
Most property managers charge this fee to handle the paperwork required with renewing a tenant's contract for another year (or more). This charge can range from a few hundred dollars to half a month's rent. While this may appear to be a superfluous expenditure, I've discovered that a skilled property manager may save you thousands of dollars in vacancy and turnover costs if they can retain tenants in the property for numerous years.

(15) Fee for eviction
These are the costs of filing the eviction and dealing with the subsequent court proceedings. This, I've discovered, varies greatly from one property management to the next. Some property managers simply pass on the filing fees, but they also handle the eviction as part of their overall management services. Most, on the other hand, charge a few hundred dollars to handle the eviction and court appearances (on top of the filing expenses).

(16) Repair Escrow
Most property managers will ask the investor for a maximum dollar limit for maintenance/repairs without requiring particular consent. This is mostly done to protect the investor from having to make minor judgments that the property manager may easily make. Most property managers do this by keeping between $200 and $400 in a repair escrow account dedicated to these types of requests.

(17) Repairs
This is, in my opinion, one of the most crucial components of property management. You might find property management who outperforms the competition in practically every other category, but if they don't have a decent, cost-effective solution for maintenance and turn-over charges, you might end up paying more. Some property managers simply outsource maintenance to third-party contractors, who may charge exorbitant handyman fees, whilst others have handymen on staff who can do repairs and handle turn-overs at a low cost. When interviewing property management companies, it's critical to know and grasp the difference.

(18) Inspections/Travel Fee
Many investors believe that someone should visit the property at least twice or three times a year to confirm that the renter is taking care of it and that there are no big issues. Most property managers include drive-by inspections in their management fees, but they may charge a separate inspection or trip fee (of $50 to $100) to go within the property and assess its condition.

(19) Insurance
While most investors don't associate homeowners insurance with property management, a few firms now do. The premiums are competitive with other landlord plans, and because the policy is owned by the property management firm, any claims against it do not affect the investor personally (i.e higher rates on personal insurance because of claim history). In addition, I've discovered that many of the master policies available through the property management business do not include vacancy exclusions. Unlike other landlord policies, which terminate coverage after 30 days of vacancy, a master policy continues to cover the property regardless of vacancy.

Why Us
At Cowries Prospecting, we have over 20 years experience in property investment, construction and management. We have several local and global partners with property holdings in various countries like the UK and UEA. We are here to guide you through your property investment journey, offering expert advice and access to promising investment opportunities. Contact us today. https://cowries.com.ng/PROPERTY.php