Property management can come in two guises, the first being the management of an overall development, and the second, the management of individual units. In this article, we will focus on the individual units, or more precisely, properties which are being used as an investment. We shall also assume that the main objective of owning the property is to generate a passive income for the client.
In such a city such as Bangkok, there is an abundance of options available when it comes to property management. In fact, there are almost too many which can complicate your decision when deciding who to choose, or perhaps, make you question whether you need the service at all! Sadly, many companies provide more questions than answers, but hopefully, this piece will help you understand exactly why you do need to call in the experts and the benefits that you will receive.
- Finding potential tenants
Finding tenants is the biggest challenge for any lessor with an increasing number of investment properties entering the marketplace. It involves marketing your property in the right places so that your target audience views it. A professional property management company will know where to market properties in order to generate interest. There is little point marketing a condo located in Bangkok in London or a five-bedroom family home, in places where it will only be viewed by students.
- Vetting tenants
Once the agency has found some potential tenants, they must be screened for their suitability. It is a complex and subjective process that is best conducted by experienced professionals who are aware of indicators that can set alarm bells ringing. Their experienced eyes will spot any red flags while also recognising the attributes of potential good tenants, ones who will pay their rent on time and look after your property. Unfortunately, no system is infallible, but effective screening will increase your chances of getting someone reliable to rent your property.
- Point of contact
For most landlords, an investment property is intended to generate a passive income, so by its very nature, it shouldn’t require much work. However, this is seldom how it works in reality and with most property owners having full-time jobs, dealing with any problems can be a major headache. A property management company will act as the first point of contact should there be a problem or repairs need to be carried out.
The issues can be very minor and solved over the phone, but you will still have been disturbed in your personal time. Often more serious problems occur during unsociable hours so as a landlord; would you want to drive to your property to resolve an issue in the early hours of the morning?
- Advice on improvements and updating your property
It is essential that you conduct regular maintenance on your property, but you may also want to consider some improvements that will make your investment more marketable. Keeping up with changing trends is important, but it is impossible to constantly make changes to match “the season’s trend”. An experienced property manager will be able to make suggestions about what changes are worthwhile and what is an unnecessary expense which will need to be changed again in six months time! The objective is to increase your ROI, so balancing your expenditure against potential increases in revenue is critical.
- Increase occupancy rates
All property owners want long-term, quality tenants and one of the essential roles of a management company is to find these people and then keep them satisfied. Naturally, the price of rent will be a factor, and it must be around the market average. However, one thing which can be more relevant and one that annoys tenants more than anything is if they feel the manager (or landlord) is unresponsive or unavailable whenever they have a problem. The whole point of employing a manager is to address this point, but ultimately, the responsibility for this will fall with the landlord.
- Financial aspects
Having fantastic tenants who look after your property is one thing, but you also need to ensure that they pay the rent on time. A property management company has a vested interest in ensuring that this is done as their management fee will be deducted from the rent. They can also enforce any penalties for breaches of contract and, in the worst-case scenario evict tenants.
In addition to this service, and one which may only apply to landlords who live overseas, is having the management company pay invoices on behalf of the owner such as maintenance fees or other costs. It is a simple service, but one that can give added peace of mind.
- Legal aspects
We live in an increasingly litigious world, and lease contracts are now more critical than ever before. The agreement must be legally binding and stand up in a court of law, but in addition to this, the landlord or management company should be fully au fait with current landlord-tenant legislation. For example, the procedures that you must follow to evict a tenant, your rights regarding damage to the property and the handling of security deposits. It is a potential minefield, and one best dealt with by professionals.
- Easy access to reliable contractors
Knowing who to turn to when you have a problem such as a concern with the roof or leaking tap can be an issue, especially if you don’t live in the area. Management companies are likely to have established deals with contractors meaning that not only can get they get repairs carried quickly and to a high standard, but they get favourable rates too. These teams are ideal for carrying out routine maintenance which can prevent more serious problems occurring in the future.
- Peace of mind
Rental properties do have the potential to cause headaches if they are not managed correctly. If you are a novice to real estate and you are not properly prepared, you are likely to question whether the move was worthwhile. A professional property management company can take all the stress away and give you a better quality of life. You can focus on building your long-term wealth and capital without worrying about the day-to-day problems. The small monthly fee will soon feel like a sound investment.