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This return is juxtaposed between the monetary income one receives during the ownership of the investment and the end value return after the property is sold.
The property manager plays a critical role in ensuring that during the period of ownership the investor attains maximum rental return possible and that upon selling it they get the maximum purchase price available on such a property given the market fundamentals prevailing at that particular time.
The initial role of the property manager is to find a suitable tenant for the particular property. The importance of this task is sometimes overshadowed when it comes to the unseasoned property manager and the huge demand prevailing in our current market because of housing shortages.
Responses to listings of available rental properties sometimes can be overbearing creating a psychological need to expedite the tenant placement
It is important that a property manager takes a step back and meticulously assess the best person who will ensure not only that rentals will be paid on time, but that the property itself will be maintained to a standard that will almost guarantee an appreciation of value.
Different property managers have different methods of assessment, it is incumbent upon the property owner to first satisfy themselves that the property managers vetting processes are sufficient to deter unworthy tenants.
Experienced managers have undergone this process several times when periods where they have had their fingers burnt, so they are normally in a position to quickly assess the right tenant. The property manager is also responsible for setting the rental price that will ascertain that the landlord gets the full benefit in rental return.
This rental return though market driven is a balance between the optimal return available in the market for similar properties and what is sustainable for the paying tenant.
An approach that focuses on high pricing without balancing it with sustainability is a recipe for potential disaster as this may result in long periods of vacancy where income is lost or worst case scenario, the engagement of cantankerous tenants.
The property manager is also responsible for drafting the leases. This is the contract between the tenant and the landlord that ensures that all necessary provisions that protect both parties are fully incorporated within the agreement. The lease is to be explicit on delegation of obligations, timeframe of tenancy and other personal provision either party would want contained in the lease.
It will remain the reference point on any future duties, misunderstanding or litigation between the parties. It is therefore critical that it is drafted concisely and unequivocally.
Though the lease may specify maintenance obligations to either the landlord or tenant, it is the property manager who ensures that such maintenance work is carried out or the parties are alerted to the need to carry out the work. This is important as all big property problems start out as small problems.
A diligent manager will ensure that the landlord is aware of all repair work necessary or preventative maintenance required and afford them where possible with quotations from contractors. Property managers normally have a network of reliable contractors be it plumbers, electricians, landscape technicians or all purpose handymen who through years of working relationships offer cheap and reliable service.
The property manager has a duty to keep all records regarding the property, leases, inspection reports, repair work, budgets and all paperwork that relate to the property.
It offers the security of back-up to the property owner. It is beneficial for a property owner to contract a scrupulous property manager for one’s property investment.
Vengai Madzima is a property investment consultant and analyst and writes in his personal capacity. He can be contacted on 0772 468093 or [email protected]
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