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.
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.
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.
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.
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.