Blog

Inspection Checklist for Property Management

Inspection Checklist for Property Management

The task of inspecting the property is crucial for preventive maintenance, and for making sure, everything on the property is in accordance with property regulations and housing laws. Regular inspections help to address problems immediately before they escalate into major issues. In property management, the requirements for inspection will vary depending on the size of the property, the number of structures, and the landscaping. However, here is a general checklist that will make the inspection job easy.

Inspecting the Grounds

Property grounds will include all common areas, parking spaces, swimming pool/s, gymnasium, tennis lawn, and the landscaped areas. Landscaped areas and small gardens are usually given to outside contractors to be looked after, and the property manager has to inspect these areas to make sure the contractor is doing the job well. Unkempt lawns and untidy garden areas offer a shabby and pitiful look to the property, which can undermine rental rates.

Swimming pools have to be inspected to see if the water and surrounding area is clean and free of debris and fallen leaves. It is best to fix dates during the year for the draining of the pool and other maintenance tasks of the surrounding fencing. Parking lots have to be checked for cleanliness and to see if the individual spaces are properly marked. Lastly, all the signs posted across the property have to be checked for deterioration and a date has to be set for having them freshly painted annually.  

Inspecting Structures

Regular inspection of all structures on the property is an important task in property management. The manager will have to keep a look out for cracks, peeling paint, growth of mildew on the walls, and loose shingles and shutters. The gutter channels running from the roof have to be checked for debris, and blocks. Inspection of structures will involve a close view as well as a view from a certain distance to observe any defects that are visible on the upper levels of structure’s sides.

Apart from the structure itself, the electrical and phone cables running from the structure have to be checked for damage. If the property has security devices like alarms and video cameras, they too have to be inspected for any problems.

Inspecting Interiors

The common areas inside the building need to be inspected for structural and other defects. It is best to begin from the lowest level in the building, which may be housing the laundry room, pump room, boilers, or heaters. These areas will be exposed to more humidity and warmth, and hence check for fungi and mildew growth on the walls.

Also, inspect the ventilation shafts and channels to check their level of functionality and efficiency. In the laundry room check to see if, all machines are functioning properly. Keep an ear open to detect unusual noises when the machines are in operation. A lot of money can be saved if problems are detected early in these machines. At each floor, check electrical fixtures and also the doors and windows. Check for water damage and keep a look out for any leakages in the plumbing.   

Skills Required in Property Management

Skills Required in Property Management

Property management is not easy, as there are many responsibilities and the property manager has to deal with different types of people. There are certain skills required for doing this job efficiently, and here is a list of the most important ones.

Organizational Skills

Property managers have to not only organize their own work but also need to organize the working of various staff members. Organizational skills are required in all aspects of this job and any weakness in this skill can have disastrous results. The manager has to organize his or her daily schedule to attain the required office work done for the day, which will include filing applications, maintaining files and records, and other related duties. The manager will also have to organize various staff teams that are involved in maintenance, repairs, and accounts.

Time Management

Property management is an extremely busy job, and the manager has to manage various tasks within limited time. The manager will have to shuffle various task efficiently, and even multi task to get the maximum results. It is not a question of doing things quickly, but allocating time efficiently for the completion of various tasks, and switching between tasks whenever required to make maximum use of the available time.

Negotiating Skills

The property manager has to negotiate with almost everybody to get the job done. Whether it is with city officials, tenants, or staff members, the manager has to negotiate matters skillfully to reach the best outcome. Negotiating with city officials, the manager has to get the plans passed and see if the property is keeping to the laws and codes. If there are any issues the matter has to be negotiated well to avoid fines and other penalties. Negotiating skills also come in handy while resolving disputes between tenants and staff members. While procuring new tenants, the manager will have to negotiate the best rentals and term, to optimize returns.

Financial and Business Skills

Property management is mainly concerned with maximizing returns for the property owner. This involves maximizing profits and minimizing various costs. The manager will have to take quick decisions on rentals, review financial documents, estimate costs of maintenance and repairs, assess the rental worth of the property according to prevailing market situations, and solve issues resulting from financial crunches. All these tasks require outstanding knowledge of finance and sharp business acumen.

Overall Technical Knowledge

There is an abundance of maintenance and repair work involved in managing any property. There will be routine issues involving plumbing, electrical, carpentry, and masonry. The property manager does not have to be an expert in all these fields, but must have some basic knowledge to oversee the work in these departments. Having some technical knowledge, the manager will be able to supervise the service staff in a much better way, and will be able to get the work properly organized and executed. If the property is need of repairs, a manager having technical knowledge will be able to hire the services at a lesser cost and to reduce the repair charges.  

Making Property Management Easy

Making Property Management Easy

When you have invested heavily in a property, you will be looking for good returns; however, property management can be a difficult task. Here are a few points that can make this job easy, and help you to avoid any legal hassles.

Selecting the Right Tenants

This is one of the most important aspects of property management, which has an overall impact on profitability and avoidance of legal issues. Picking the right tenants is a skill, and involves some investigation. Firstly, you need to know whether the potential tenant really loves your property, as you want someone who will stay for a long term. You can make this out by the person’s interest in your property. If they want to visit other properties before making a decision, then they are still not sure.

You also need to have a system in place, for checking various aspects of the potential tenant. You need to run a check to see if the person is financially sound, and the reason he or she is looking for a new place to stay. Getting feedback from their previous landlord is very good, but this may not be always possible. Select tenants who are employed and have a reasonably good financial background. Check to see if there are any criminal records against the person, and whether there have been any incidents reported in the past.

Drafting the Lease or Rental Agreement

This is the most valuable documentation and it has to be drafted carefully by an experienced attorney. It should include all the points regarding the rent, rental duration, and other terms. Everything should be spelt out clearly so that the tenant is aware of his or her rights and responsibilities, and what services they can expect from you. This is a legal agreement, and you could be sued if you do not adhere to the terms and conditions that you have agreed to in this document. Covering all possible points in the agreement will reduce the chances of legal issues and costly lawsuits in future.

Payment of Rent

You should decide the mode of rental payment; whether you want it by check, auto debit, or cash. It is better to have a payment mode that leaves a trail, so that it can be proved whether the payment was made or not. In cash transaction the tenant can claim that payment was made, when it actually was not so. Even if you issue a receipt, the tenant can claim, you had forgotten to give a receipt.

However, make sure you select a mode that is convenient for the tenant like direct bank deposit, if the tenant does not have a checking account. In the rental agreement also clearly state, the grace period allowed for rent payment, and the penalties for late payment. Also, have a strict policy against partial payments, as it can be very difficult to maintain records and track outstanding amounts when you have many tenants.

Security Deposit

This should be held for compensating any damages done to your property, and should never be allowed for compensating a missed rent payment.

Property Management Task List

Property Management Task List

Property management requires a fair amount of planning and timely execution of various tasks. There are many important routine tasks, and it is prudent to keep a task list handy. Here are some important items that you should consider including in your task list.

Schedules for Inspections

It is very important to conduct inspection of the individual units as well as the common areas of the property at regular intervals. An inspection of signage also has to be performed at least once a year, to verify that the required signage is posted properly on the property. Inspection tasks are often forgotten because they are to be done once or twice in a year. Hence, prepare a schedule for the respective inspections and include them in your task lists for particular months.

File Management

Filing can be one of the most time consuming and challenging tasks if not handled properly. Keep a reminder for regular filing work that has to be done on a daily basis, but most important is to set the date for doing jobs such as archiving and disposal of unwanted files. For archiving, you will want to place files of the prior year in storage boxes or separate cabinets, so that they are not mixed up with the files of the current year. Older files that are dated past two years can be moved to long-term storage.  

Property management involves lot of documentation and paper work and you need to form a policy about the retention of documents. You can update this policy depending on legal changes and things you might have learnt during the past year. However, review your documents at regular intervals and either archive or dispose files that are not needed. If you are disposing papers and files, make sure they are destroyed, instead of merely throwing them in the trashcan. If the required equipment for proper disposal is not available on the property, it is advisable to hire document disposal service, which will handle the job professionally.

Policies and Annual Forms

Distribution of various forms to staff members and tenants is an important task each year. These forms are needed for legal compliance of various issues, such as W-4 for taxation and so on. If new laws have come about, you will have to formulate new policies to accommodate these laws and inform the concerned parties. Acknowledging ongoing policies annually is also fantastic and prudent practice, as that will remind staff members and tenants what they need to follow.

Meetings

If you are holding tenant or staff meetings then they have to be planned and the agenda and invitations should be sent much in advance. Although these tasks seem simple, they can pile up if you are not vigilant, and you might not have the time to complete them.

Education Compliance

First, determine what type of continuing education is required for staff members and then plan for the whole year. For instance, you might need to hold legally required courses for meeting licensing requirements, or for fair housing, and so on.

Functions of a Professional Property Management Company

Functions of a Professional Property Management Company

A property owner should hire a professional property management company to maximize ROI and avoid getting into legal trouble. The property manager will act as an agent of the owner, discharge the duties honestly, and will have full understanding of the expectations and goals of the owner. Here are some important functions that a property management company performs.

Occupancy Maximization

The occupancy level of a property directly relates to income generation, and when there are vacancies, it implies financial losses for the owner. Hence, the primary goal of a property management company would be to maximize the occupancy rate on the property. The strategies used to improve occupancy will vary between properties, as the cost of procuring new tenants has to be carefully calculated against the potential income of the property. It is usually a two-pronged approach, where the manager will try to retain existing tenants and find new ones. The property manager will evaluate rents prevailing in the current market conditions and work out the cost of various advertising strategies, including newspaper advertising, online ad campaigns, and posting banner ads in the area.

Legal Compliance

There are many rules, regulations and laws pertaining to operating and managing properties, and non-compliance of these laws can lead to serious legal complications, expensive litigations, and fines. Secondly, the property manager will have to deal with lease negotiations, eviction notices, landlord-tenant agreements, and other legal matters concerning the property and its maintenance.

Maintenance

Protecting and maintaining a property is a major task that takes a lot of time and effort. A property that is carefully maintained keeps tenants happy, and preserves the appeal of the property. The manager will have to implement a maintenance strategy, which is not only cost effective, but will also keep all aspects of the property in outstanding and in full functioning order. The amount of preventive maintenance, cosmetic repairs, and corrective emergency repairs possible will ultimately depend on available cash flow, ROI, and the need for maintaining the reputation of the property.

Communicating with the Owner

 

Property owners want their managers to keep them updated on all matters regarding their property. However, the detail and frequency of these communications will vary depending on the requirements of each owner. A dependable and experienced property management company will have an effective system in place that will report important matters concerning the property at regular intervals to the owner. Some companies maintain efficient online portals accessible to the owners where all the current information regarding the property is available.
 

Financial Reporting

This is another key function of a property manager, as all owners want to know where they stand monetarily with regard to the properties they own. Financial reports will have to be prepared according to specific accounting requirements of the owner. The manager will also have to prepare certain accounting statements that are legally required to be submitted to the authorities. The types of financial reports will also vary depending on the supervisory requirements, and ownership structure. Most property management firms now use sophisticated software to maintain an efficient and poignant financial reporting system.

Page 64 of 74