What Property Management Includes?
Are you looking for a property management firm? Hiring a property management company is an amazing way to save time and money.
While the services of property management companies differ, the basics are the same. However, it's important to understand what those are to make sure that the company you hire is a good fit for your needs. Before we get there, let's talk about property management briefly.
The monitoring and management of various commercial and residential real estate properties is known as property management. This includes managing all aspects of a property's daily operations, like collecting rent, handling maintenance, dealing with tenant complaints, etc. The amount of responsibilities property managers have depends on their lease agreement with the landlord.
For example, a landlord can hire a property management company to help with one task, such as collecting rent, or they can specify that they want them to handle all business operations for their property.
Let us now look more closely at what property management includes.
Administrative services include preparing documents, handling finances, and keeping property records. To do this, property management companies communicate with the owner, tenants, and contractors. They also deal with the day-to-day operations and tasks that need to be completed.
At PropertyAngel, we take care of everything from tenant requests to handling emergencies, moving-outs, etc. We will even handle the eviction if necessary.
Leasing and Marketing Services
Most property management companies include leasing and marketing in their service package. This service includes listing your property, showing it to potential tenants, and screening them. At PropertyAngel, we market our client's properties by posting pictures and videos on our website, social media, and various real estate portals.
Once a tenant is found, the property management company will handle all paperwork and lease negotiations.
Most property management companies offer financial services to their clients. This can include collecting rent, paying bills, and even preparing tax returns.
The scope of these services will differ from company to company. This can provide a much-needed service for landlords who may lack the time or knowledge to handle these tasks themselves.
This is a valuable service for landlords and property managers who need to keep track of their expenses and income. Making informed decisions about the property would be easier with bookkeeping. Plus, it's possible to identify potential financial problems through bookkeeping.
If your rental business grows to the point where you need property management, you'll have much less to worry about. Upon handing over your properties, your manager will take care of everything else.
Your property manager's specific responsibilities will vary depending on the type of property and the terms of your contract. Managing a large apartment complex differs from managing a dozen single-family homes. Make sure you clearly understand the terms of your contract with the property management company.
To make your rental portfolio work for you, call us at (91-80-47095974) or (91-7406484455).
Hiring a good property manager is more of an asset than an expense for successful real estate investors.
The best property management companies help you keep your rental property occupied year after year, increase your return on investment (ROI), and free up your valuable time.
How Property Management Charges Work
Typically, property management charges are structured in one of three ways:
1. Percentage of Monthly Rent
Usually, property management companies charge a monthly fee ranging from 8% to 12% of the monthly rent collected. For example, if your monthly rent is ₹12,000, the property management fee would be ₹1200 based on a 10% average fee.
When a vacant property is leased to a new tenant, management companies typically charge a fixed fee or a fee equal to the anticipated monthly rent. Vacant properties may require additional management work, such as weekly inspections for potential break-ins or the presence of trespassers.
2. Fixed Property Management Fee
Some property managers charge a flat fee rather than a percentage of the monthly rent. Usually, the fixed property management charges depend on the property type, square footage, and property management services provided.
The fixed property management charges will vary by market. While a flat fee structure may seem a good deal at first glance, management companies that collect a fixed fee may not be as motivated to maximize your property's rental income.
3. Sublet/Guaranteed Rent Model
In this model, the property management company will lease the property from you, and then sublease it to another tenant. The advantage is that you will get rent for your property even if your property is vacant.
While this may seem like an ideal arrangement, it comes with several disadvantages.
The Property Management Company will ideally ask you to sign a sublease agreement with them where they will acquire the power to sub-let your property to preferred tenants. Here you will lose control over your property. You would get lower rent than the market value, as clearly the management company would need to earn a profit, even after taking a hit of the vacancy loss.
It is difficult to ensure monthly payments when your property is vacant, hence the chances of default are very high, as we have seen with almost all companies offering this model, during the pandemic.
Additional Property Management Fees
Property management charges are not always all-inclusive. A management company may charge for additional services besides the monthly fee collected:
Contract Setup Fee
Most property management firms will charge a one-time setup fee for the following costs:
Because there are more potential problems, managing a vacant property can be more labour-intensive for a property management company than managing a tenanted property.
Because utilities must be left on for showings, security lights could burn out, or water leaks could unexpectedly occur. Even in the best neighbourhoods, the longer a rental property sits vacant, the greater the risk of it being broken into or vandalised. Therefore, the property manager will need to visit the property at least once a week to help minimise these risks.
Premium marketing charges
There are plenty of rental listing websites where you can list a vacant rental property and reach out to millions of potential tenants each month. Some of these charge a premium fee for a more prominent listing.
While some property management companies do not charge this fee back to a customer, some others do. At PropertyAngel, we completely absorb this cost. It is not charged to the customer.
Repairs and Maintenance | property management charges
The best property management companies will have a well-established network of reliable vendors. Maintenance and repair costs should be lower than what you could find on your own because most vendors offer a property management company's preferred pricing in exchange for the business. Thus, when interviewing prospective property management companies, make sure to ask about any labour and supply cost markups. For example, at PropertyAngel we have standardised most maintenance costs and this is shared with the customers at the outset.
Routine Inspection Fees
Generally, a residential rental property should be inspected every three to six months. Routine inspections help to catch and fix minor issues before they become big and expensive, as well as to ensure that the tenant is not causing damage to the property.
Like PropertyAngel, some property management companies will conduct a semi-annual inspection at no charge. Others may request that you pay for each inspection for a lower monthly property management fee.
Although it doesn't happen often, there may come a time when you must evict a tenant for nonpayment of rent, causing repeated disruption in the neighbourhood, or destroying your rental property. Big property management companies may have the expertise to handle evictions on their own, whereas others will hire a local law firm that specialises in residential evictions to handle the work, which leads to eviction fees.
Contract Termination Fee | property management charges
Unless the landlord breaches the property management contract "for cause," such as the manager failing to perform as agreed, breaking the property management agreement early will usually result in an early contract termination fee.
Termination fees can differ greatly and can range from one month's lost income to a landlord being sued for breach of contract.
PropertyAngel, a leading O2O (online-to-offline) property management company, headquartered in Bangalore, and founded to serve landlords with the best property management services. To make your real estate portfolio work for you, fill out our Inquiry Form or call us at (91-80-47095974) or (91-7406484455).
Do visit our blog page for more property management updates.
Not every landlord wants to manage rental properties. This is because managing the property management process is both time-consuming and very unpredictable. In fact, it would be hard to find a landlord eager to do the routine tasks that come with renting out a house. But many people take on the role of property management. And for some people, this means losing money because the hopes of a consistent rental income who self-manage might quickly fade because of the lack of effective property management skills. Today, most people have a lot on their plate and hardly any time for additional duties, much like the ones that come with managing your own properties.
However, turning your properties into thriving, profitable investments is important to your success as a landlord. In short, it means letting go of routine tasks in order to improve the efficiency of your rental business. To achieve this, you need to hire the best property management company. The right property management company in Bangalore will have a reliable property management process. A strong property management process will give you ongoing peace of mind so that you can focus on your day-to-day business and life. We provide some insight into how the property management process should work for any rental property owner struggling to make a profit.
How Property Management Works
Property management is hard work with long, unpredictable hours. While some investors would not consider purchasing a rental property without first hiring a property management company. Others struggle to break free from the DIY mentality that prevents them from achieving more. Several investors consider property management a liability to their bottom lines, so they do not want to pay for it. While it is true that property management is costly, it is best to consider it an investment.
As you can see, good property management can easily return more than their initial investment. After all, a good property management company in Bangalore will usually offer multiple benefits in exchange for their fee. Property management, also known as rental management, is the administration of a rental property's finances, marketing, and maintenance. They are in charge of handling the day-to-day operations of your rental property.
Stress-Free Property Management Process
You don't need to worry about how you will find new tenants. Or whether they are suitable tenants for your rental property. A strong property management process, like most good property management companies, can make owning a rental stress-free. A solid property management process typically includes the following steps:
Assessing: how much to charge for rent, and how long will it take to rent
Inspecting: make recommendations on how to get your property rent ready
Marketing: list and effectively market your home to people looking for homes to rent
Showing: being available to show vacant units to prospective tenants
Screening: use a thorough screening process to find good tenants you can be confident in
Signing: takes care of the leasing paperwork for you & collects the security deposit
Collecting: collects the rent and deals with late rent payments (if any)
Maintaining: handles and performs all property maintenance, including maintenance emergencies
Repairing: handles and performs all necessary rental property repairs
Renewing: deals with the lease renewal process
Move In & Move Out: keeps the property in optimal condition by inspecting it each time a tenant moves in or moves out
Eviction: takes care of the difficult eviction process for you (if and when needed)
PropertyAngel - Property Management Company in Bangalore
As an effective well-established O2O Property Management Company in Bangalore, our main objective at PropertyAngel is to turn your rental properties into lucrative investments. We aim to create and maintain the financial success of your rental property while freeing you from day-to-day management responsibilities. Our property management services will allow you to enjoy the benefits of being an owner without having to deal with the hassles of managing your own properties. By doing business with PropertyAngel, you will be working with a qualified and professional team of property managers whose sole focus is YOU.
We manage all residential properties, including villas, apartments,building units and individual houses. Let us manage your rental properties so you can focus on living your life! Call us at (91-80-47095974) or (91-7406484455) right away.