How does a Property Management Company work?
The Property management working process is a series of steps undertaken for value retention and maintenance of the property. It is aimed at generating passive income for NRI/absentee property owners.
A property management company lays out an ideal working process for the owners before signing the agreement. In reality, however, this working process is made of a set of sub-processes. These sub-processes are concerned with the management of tenants and rents, repairing and renovation tasks, and budgeting.
Owners should know the Property Management Company’s Modus Operandi!
Handing over your property to Property management services in India can be a wise decision. It takes away the worry, saves time and ensures steady rental income. Besides, your home’s value would also rise over time through proper maintenance and improvements.
However, merely entrusting your home to property management services for NRI is not enough. You should know their modus operandi before you sign the agreement. The reasons are simple:
- It is YOUR property! You have every right to know how it going to be managed.
- You can compare the services of different property management companies.
- You ought to be a busy person. Knowing in advance how often and for what purposes you would be bothered during the agreement term helps time management.
- You would be able to track what is happening with and on your property.
- It would ensure that no crucial step in renting and maintenance is skipped by the property managers.
The Property Management Working Process in Detail
Screening the proprietor is the first step in Property Management process. It is followed by proprietor/landlord/owner on-boarding. Thereafter, the working process is constituted of sequenced tasks concerning the following.
- Rent Management
- Tenant Management
- Property Maintenance
The actual operation of the process would depend upon the services agreed upon in the owner- company agreement. You may or may not avail all of the aforementioned services.
#1. Owner Onboarding
Owner screening and on-boarding precede all and any management tasks. Before the company takes charge of your house, it will carry out the following tasks:
- Collect your personal details and property documents for verification.
- Check the insurance details.
- Inspect the property condition and suggest how to increase its value.
- Collect the tenant preferences information.
- Discuss the service charges.
- Prepare the management agreement.
#2. Rent Management
Rent is the source of income for you and the property management company as well. The rental management company aims to set the optimum rent. It knows that the happier the owners are with rental income, the more likely they are to maximize and retain the services.
To set the right rent, the company conducts a rental market research which involves:
- Finding the average rent in the area for the season.
- Marking out specific advantages that your property offers.
- Finding out your rental income expectations.
- Discussing and deciding the rent depending upon the type and number of tenants.
- Forecasting the rental income.
Thereafter, the company advertises the property in the rental market. Once the tenants move-in, it ensures that the rent is paid and collected in time.
#3. Tenant Management
This is the most crucial of all aspects of the process. It is an ongoing task and could be a real headache without a property management company. It involves tenant selection, ensuring tenant comfort and managing move-outs.
Tenant selection involves the following tasks:
- Shortlisting the prospective tenants and taking them for walk-throughs.
- Screening the tenants for the following:
- Their income sources, occupation and employment details.
- Previous landlord references.
- Smoking and drinking habits.
- Clean police records.
- Communicating the selection to the owner and preparing the rent agreement.
The company undertakes a number of tasks to ensure tenant satisfaction.
- Address complaints regarding nuisance created by neighbours or residential society staff.
- Handle everyday issues like cleanliness, noise pollution, parking, pets etc.
- Carry out emergency repairs without delay.
- Consult the owner if the tenant requires any new fittings or services.
Before a tenant vacates your premises, the managers:
- Check that no harm has been done to the interiors, fittings or exteriors of the premises.
- Check that all the dues have been paid by the tenant.
- Offer them moving services and ensure that none of their belongings are left.
In-case the unfortunate situation of eviction arises, they:
- Send prior official notice for breaking the agreement to tenants.
- Hire legal aid if the need arises and move court.
- Carry out eviction without evoking animosity with tenants or causing disturbance to neighbours.
#4. Property Maintenance
Maintenance tasks are numerous. They are of two kinds, regular and end-season. The NRI property management company takes the following course towards keeping your house in good shape and raising its value.
- Carry out periodic and surprise inspections.
- Update you regarding the condition of property mid-season if serious repairs are required.
- Send you visual reports regarding the state of your property at regular intervals.
- Communicate the renovation plans at the end of each season after carrying out detailed inspection.
- Regularly update you about possible interior designing options.
- Suggest urgent renovation and interior designing measures if your real-estate investment has chances of falling-back in rental market competition.
- Receive quotes from vendors and provide the maintenance pricing details.
- Carry out the maintenance tasks involving vendors:
- Monitoring and supervising the repairing, renovation and designing work.
- Prepare invoices and make payments to workers and interior designers.
- Inspect the work after its conclusion.
- Reach out to vendors and contractors in case of lack of quality of materials and work.
- Get the matters fixed where negligence had occurred.
The company links you to vendors and repairing staff. You can thus remotely participate in makeover process of your home.
#5. Budgeting and Accounting
This has to do with all the money matters of real-estate management. Managers from the company take care of:
- Paying the electricity, water, gas, internet, etc. bills.
- Paying the various property related taxes.
- Paying the residential society maintenance charges.
- Forecasting and communicating the net rental income after deducting the expenses and property management service charges.
Property Management Working Process for Secure Upkeep
The property management processes pursued on your property are more than a simple exchange of management fees and services. Hiring a property management company carries a few hidden advantages as well.
Since the company is in-charge of everything that goes with and inside your home, the chances of its misuse are minimized. No one would be able to use your premises without your knowledge and without paying for it. Your property would be safe from property sharks in the area while you are away for long durations.
Above all, the company conducts periodic checks that your property does not over-step any regulations. It is an implicit responsibility of the company. Your home thus remains compatible with local, provincial and national level property use laws without extra charges.
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