How to Choose a Property Manager for Your Rental
A rental property bringing in a steady cash flow is a great asset to have. Several investors in the real estate industry tend to buy properties and, after minor repairs, lease them to the tenants. However, it can also be a difficult decision to leave your property entirely in the hands of tenants.
Unfortunately, as is the case with most rental properties, tenants do not uphold the responsibility of taking care of the property. This can even cause a financial loss to the owner. In such cases, owners need to hire a property manager.
An experienced property manager will take good care of the property, keep the tenants satisfied, and maintain a steady cash flow for the owners. However, if you hire an inexperienced property manager, he or she can mishandle the property and tenants, eventually causing a low retention rate. Therefore, it is essential to hire the right professional.
Feeta.pk, Pakistan’s smartest property portal has prepared a guide to help you choose the right property manager for your rental.
Benefits of Hiring a Property Manager
Hiring a property manager comes at a cost, but it saves you the hassle of property management and legal procedures, among several other things. The following are some of the benefits of appointing the right property manager:
- Ensures traction on the property with effective marketing
- Helps you obtain high-quality tenants
- Saves you from any legal issues
- Maintains proper rent collection and cash flow
- Eases the eviction process
- Maintains solid monthly reporting and accounting
- Acquires a higher holding retention rate
- Ensures proper maintenance and repair work
- Prevents longer periods of property vacancy
Tips to Choose the Right Property Manager
A property manager can help you build a good portfolio in the market. However, finding the right professional is not an easy task. Rental property management is a long, complex process that involves tenant screening, constant communication, and property maintenance.
To choose the right property manager, you can follow the tips given below:
- Research the market
- Stick with local expertise
- Look for Organization and Tech Expertise
- Conduct multiple interviews
- Get referrals
- Prefer a proven track record
- Look for licensed property managers
- Review local ads
Let’s discuss these tips in detail for a better understanding:
Research the Market
Market research is essential when choosing a property manager. These days, technology has made this easier for property owners to look for relevant firms and professionals, and shortlist those with the best reviews.
Once you have prepared a list of potential property managers, you should check the following key information on their websites:
- List of services they provide
- Management charges and schedule
- Staff and leadership information
- Services for tenants and owners
- Contact information
- Customer testimonials
- Having reviews
- Original license
Stick with Local Expertise
Property management requires a thorough understanding of the local markets. Experts are well aware of various market factors, thus making the process easier for both owners and tenants. Before choosing a property manager, you can inquire about their knowledge of the following factors:
- Tenancy laws and licensing: Different areas have different property laws that govern tenancy conditions and rental licensing. During the tenancy, some problems may occur that would require a legal solution, hence, the property manager should be aware of related procedures and laws.
- Market demographics: Understanding the market demographics helps acquire the right tenants and maintain the tenancy rate. For instance, if a property is located in an area with a large student population, the property manager will help market the property as a suitable option for students.
- Vendor relationships: Property management requires property maintenance and repairs at different intervals. If the manager is unaware of the vendors in the local market, the cost of property management will be high.
Look for Organization and Tech Expertise
Property management is all about organization. If the property manager does not take care of everything meticulously, it might result in a bad reputation for your property. For this, proper documentation and communication are essential.
Electronic systems are secure and help maintain quick and effective communication. Technology awareness can also help find the best solutions for various problems. So, managers that are up to date with the latest technological trends can provide huge benefits to owners and tenants.
Conduct Multiple Interviews
While you are looking for a property manager, several candidates might approach you with their portfolios. You need to gather as much information as possible before proceeding further.
While you are interviewing candidates, the following questions might help you in getting the best results:
- How long have you been in the property management business?
- What will you cover in the monthly management fee?
- What are the conditions for the management fee?
- Will you provide a property management agreement?
- How many properties can you cover each month?
- What are the basic tenant requirements and basic screening process?
- How do you carry out property inspections?
- What is your deposit returning policy?
- Are you aware of the demographics of the area?
- Do you have an online portal for tenants and owners?
- Will you provide monthly and annual financial and property management reports?
These questions will help you analyze the management skills and professionalism of the applicants.
An important way to hire the best property manager is to get referrals from friends and investors in the market. If a manager or a company has a bad reputation, it will eventually come out when consulted with others. Similarly, good property managers will have a stellar reputation in the market, and everyone will suggest their services.
Prefer Proven Track Record
A professional’s track record with previous clients can give you a better idea about the quality of his or her services. When choosing a property manager, look for an individual who has the best projects in his portfolio.
Generally, owners look for the average time property managers take to fill a vacant property. Moreover, the maintenance factor should also be kept a priority. If the track record of a property manager shows excellent property maintenance, he or she should be your first choice.
Look for Licensed Property Managers
Property managers with licenses and proper documentation are a safer option for better management of your rental. Some property handlers have a good reputation in the market and a strong track record, but they lack legal authority. It makes them unreliable.
A licensed property manager is certified by the local government. They have taken the required property management courses and exams, which means they have a comprehensive knowledge of property management.
Review Local Ads
Property managers use local property advertisement agencies to share details about vacancies in different areas. These ads are displayed in newspapers or simply on digital platforms. For instance, big real estate companies or property management firms utilize their websites to display rental properties.
These ads and classifieds are your best ways to analyze the best property managers. Look for the following features in ads to help you make your decision:
- Unit Description: The best unit descriptions describe the rental place in detail, with all its features listed. If the management firm is showcasing all aspects of the property, it shows professionalism.
- Quality Photos: These days, property advertisement has become easier because of digital platforms. If the property manager displays quality images of the property to attract the tenants, it shows his professionalism.
- Virtual Tour of the Property: With the arrival of technology, it has become possible for managers to arrange virtual tours of rental properties. This helps the tenants in ‘visiting’ the property virtually from any place.
These aspects can help you find the property manager you are looking for.
To get more information about rental property management tips, visit Feeta Blog.
10 Most Commonly Asked Questions About Real Estate Investment
To answer the most commonly asked questions about real estate investment, understanding various factors is essential.
Real estate investment seems overwhelming to beginners because of the significant financial growth linked to it. In Pakistan, it is one of the most lucrative and highly-profitable investments. Construction projects across the country are attracting investors to secure their assets for a better future.
However, investing in the real estate industry is a complex process. Many new investors fail because they are unaware of the factors that can influence their investments. They tend to repeat common mistakes and lose their investments. So, a solid knowledge of the industry is essential before pouring money into real estate.
One way to predict the ups and downs of the market is to ask questions from experts. Real estate market analysts keep a track of key factors over time as it helps them predict market dynamics accurately. Gaining their insights can give you direction when investing.
Feeta.pk, Pakistan’s smartest property portal brings you answers to the 10 most commonly asked questions about real estate investment.
10 Most Commonly Asked Questions About Real Estate Investment
Familiarity with answers to the most common questions of real estate investment can help to avoid the most common mistakes during real estate investment. Here are the questions that every new real estate investor asks:
- What are the ways to determine the value of an investment property?
- How can one finance real estate deals?
- What is the best real estate investment strategy?
- Where can one find profitable investment areas?
- Can investments in real estate begin with no money?
- Are real estate agents essential to buy or sell any property?
- How can one predict rent charges for their property?
- How can one find the right tenant for a property?
- Who handles the basic repair value of a property?
- What should be the financial goals?
Let’s dig into the details of these questions and find out the answers.
What are the ways to determine the value of an investment property?
As a beginner in the real estate market, it can be difficult to find out the prices of properties. When it comes to selling or buying a property, both sides involve different factors. So, what are the ways that can help determine the value of a property?
Comparative market analysis (CMA) is one of the best methods to solve this problem. While working in a market with many properties on sale and many investors involved, it is easy to predict the rates of a property according to the area. An in-depth analysis of the most recently sold properties can give you the best estimate.
CMA reports are set by the real estate agents in the market, which helps new sellers and buyers with listing prices and estimates for investments. CMA compares one property to another with the same features, area, and facilities.
Another way to predict a property’s value is to get help from government officials. Land record offices have all the properties listed according to their locations. Moreover, they set a base price per sq. ft. of each property. Hence, it can help a lot in predicting the overall price of the property.
How can one finance real estate deals?
For most beginners, financing a real estate deal is the biggest problem. With no stable income sources, they fail to invest in any property and eventually fail to get started. However, proper awareness of potential sources that can generate finances for investments can be helpful.
There are two ways to generate finance: selling an old, self-owned property or acquiring conventional property investment loans. The first method can become a source of positive ongoing cash flow. Selling a home and then buying a new property can give you hefty annual returns on your initial investment.
Most people living in rural areas of Pakistan own a large number of properties. But, due to remote locations, these properties are considered practically worthless. So, these days, people from rural areas are selling their properties and investing in real estate projects in major cities instead.
On the other hand, for most investors with no previously owned property, loans are the only way to start real estate investments. However, these investments are not desirable as annual returns are not too high.
What is the best real estate investment strategy?
Without a proper strategy, a real estate investment is bound to fail. According to real estate experts, most beginners lose their investments because they do not strategize beforehand. Beginners are under the false impression that possessing a sufficient amount of money is all that is required, and it will give them profitable returns straightaway. However, the reality is pretty much the opposite.
Successful real estate investors formulate a strategy based on their investment goals, which helps them in their next venture. It provides them with a timeline to hold on to their assets and then invest at the right time. So, tuning investment strategy to goals is essential.
Generally, there are three main strategies that successful investors follow: opportunistic, add-on, and core. Moreover, factors such as types of property and location can also influence the decisions. For example, commercial properties are profitable as compared to residential properties.
How can one find profitable investment areas?
A very important factor to consider before investing in real estate is to choose the right area. Pouring money into properties with no real value is not a good strategy. With the recent widespread development of residential and commercial projects around Pakistan, property prices have skyrocketed.
Commercial properties have a higher value as compared to residential properties. For an investor who is looking to grow assets in a relatively short time, investment in commercial areas is recommended. Houses need repairs and time to increase their value.
Moreover, the availability of water, gas, and transport systems near a property also influences its value. If it does not have such facilities, it is not desirable for buyers.
Can investments in real estate begin with no money?
The state of one’s finances is the most important factor to start a real estate investment. However, in cases where investors do not have enough money to pay for down payments, investors need to be more creative. Funds can be generated in several ways to finance a real estate deal. However, these cannot be guaranteed every time as the market keeps changing. Some of these ways have been listed below:
- Real estate partnerships
- Wholesale dealings
- Conventional property investment loans
- Home equity loans
Are real estate agents essential to buy or sell any property?
One can start investing in the real estate market without any external help. However, the process will be time-consuming and rigorous as the market is much more complex to understand. The presence of a real estate agent can help a great deal as they are aware of all the complexities of the market as well as the processes that are involved in a property deal.
From evaluating markets, finding an attorney, and getting pre-approved loans, to negotiating and closing the deal, the real estate agent makes everything smooth and easy. However, with hundreds of agents in the market, scammers get the chance to target investors. So, choosing the right real estate agent is also important.
How can one predict rent charges for my property?
For investors who purchase properties to rent them out, a basic awareness of the right rent charges is essential. Proper rent estimation helps in advertising the property. An over-estimated property may remain vacant and a low-rented property might end up in negative cash flow.
An analysis of how tenants navigate the competitive rental market gives the best estimate of a property’s rent. Local market conditions and rates can also help you in advertising your property with the right rent charges.
How can one find the right tenant for a property?
If you have rented out a property, you would want to ensure that it is kept safe and protected. A good tenant takes care of your rental property and also makes rent payments on time.
When choosing the right tenant, proper screening is important. Check the references they have provided you with for a more thorough screening process.
Who handles the basic repair value of a property?
While purchasing any property, buyers are concerned about the expenses of basic repairs. Hiring professional teams can cost you a lot of money and affect your profits. If you are a new buyer, you should preferably do all the minor repairs yourself. It will help you keep the cost in control.
However, if you are a potential real estate investor, then you can hire a team to carry out all the repair and renovation work, as this helps to enhance the overall rates of a property.
What should be the financial goals?
Just like the right strategy, the right financial goals are also important. Whether you are a part-timer or a full-time investor, you need to have everything figured out. Should you hold on to the property until prices appreciate to make a profit? Or should you buy a commercial property to start your own business?
Before you start investing, also try to make an accurate calculation of whether you might end up losing money in the first few months, the point at which you may break even, and how much you can expect to make after three to five years.
Factors Influencing Real Estate Investment
Apart from all the above questions, new investors must also be aware of the factors that can influence their real estate investments:
- Demographics of the country
- Government policies
- The annual budget of the country
- Employment opportunities
- Interest rates on loans and property
- Market trust
- Tax policies
To get more information about real estate investment in Pakistan, visit Feeta blogs.