Dwindling stock markets amidst the recession is driving Real Estate to the center of investment portfolios. Yet, buying new property or owning many valuable properties might not be enough. Investors and property owners can take full advantage of the shift only with property managers that have foresight.
Often, the absentee owners misjudge the need for NRI property management. They make all the effort and overspend to manage their property but end up frustrated. Not only does their property lose value but, they also miss out on rental income without realizing it.
Professional property management can mean a sea change for your investment plans. Before we look at what is achievable by hiring a Property Management Company, let’s briefly understand what it is!
What is Property Management?
Imagine what would happen if your home lies in neglect while you are abroad. Its value would depreciate over time. Your property would be at the risk of being used or occupied illegally. It could be swallowed by property sharks. Finally, you would have to spend a lot of money for repairs and renovation when you take back charge.
In short, your property would become a liability of sorts. Property Management is meant to avoid all these and turn your home into a profitable investment! Moreover, it is intended to generate passive rental income besides ensuring gradual value appreciation.
By confiding your property in the safe hands of a property management company, you are ensured that it:
- Remains the top choice for tenants.
- Generates a steady income.
- Retains its value in the rental and resale market.
- Does not lag in style and comfort.
- Is in tune with the latest interior designing
- Undergoes maintenance regularly.
Over the years, property management companies have overtaken the role of traditional brokers in the rental market. In fact, they have added new dimensions to renting. There is little wonder that property management companies are judged by their rent management services.
Why is Rent Management so important?
Rent Management is tied intrinsically to the very logic of property management. It creates a win-win situation for both the property managers and the owners.
Rent management is directed towards generating a regular flow of optimum rental income for the owners. A part of this income is invested in maintaining, repairing, renovating and interior designing so that the property remains in-demand. This also ensures that the property increases its value at a higher rate than it would have without being professionally managed. A fraction of the rental income forms the property manager’s fees.
Your rental income, the income of property manager, and the value-expansion of property are all dependent upon effective rent management.
What can owners expect from Rent Management Services?
Rent management is not just about money. It is more than that. It is obvious that income generation from property is the chief concern of an owner and property manager. However, the prerequisites for steady rental incomes are more than just setting the rent and finding a tenant.
The main challenge of rent management is minimizing the vacancy period and finding the RIGHT tenants. It is the right balance between occupancy and rent that matters. It ensures maximum annual rental income.
Minimizing the Vacancy Period – How?
Property management companies undertake the following tasks to maximize the occupancy period.
- They conduct elaborate neighbourhood surveys and rental market analyses to decide the best possible rent your property can fetch.
- They mark possible tenant types in the area. Depending upon that, they suggest renovation and interior designing tasks that would make the property attractive to prospective tenants.
- They advertise your home to the right people through multiple channels.
Who are the RIGHT tenants?
High occupancy is not enough in ensuring a good rental income. A lot depends upon the kind of tenants your property draws. Right tenants are those who:
- Have a clean police record.
- Have a regular source of income and can pay rent in time.
- Wish to use the property for positive and productive purposes.
- Are not reckless. Else the repair and maintenance costs would go up!
- Are not renting for a few months.
- Are most likely not to vacate mid-season.
The property maintenance company’s experience in handling and selecting tenants counts!
Property managers lay special focus on tenant experience. They organize walk-throughs, handle everyday issues that arise during their stay, prepare agreements and help them in moving their stuff. This goes a long way in ensuring smoother rental payments.
Is it a good idea to avail rent management services exclusive of other property management services?
Property management services include home maintenance, interior designing and budgeting besides rent management. You can opt for these services depending upon a number of factors:
How long are you going to stay away from their property?
If your stay outside the city where your property is located is about to conclude, you may only require rent management. It has to do with income, and no one wants to lose out on that! You might prefer to go for renovation, designing and repairs in your presence. Elaborate budgeting exercise would not be needed in such a scenario.
There is no question of changing the interior designs of a new home.
How long do you wish to retain the property?
If you are planning to sell your home in the near future, interior designing has to be done accordingly. There is a difference between interior designing for renting, resale and personal use.
When was your home’s last renovation and makeover?
There are two types of property maintenance tasks. Routine maintenance tasks include payment of bills, taxes and housing society charges. They may include minor repairs. You have little choice regarding these.
Occasional maintenance tasks include major repairs and renovation, and checking that the property is not overstepping any laws and regulations. These may not have to be carried out every season.
Similarly, interior design should be carried out with tenant needs and net rental income in sight. There are a few thumb rules for that like spaciousness, neutral wall paints, dark floors and strong fittings. You may require renting focused interior designing services when you convert your home into rental property for the first time. Subsequently, interior designing services would be required only once in a few years. To match with the new trends!
If property is your long-term investment…
Owners of multiple properties and those that seek to retain valuable properties as long-term investments need all property management services. Or let’s say that’s the best option for them! They get maximum benefits as property is maintained and designed season after season with the aim of rental income.
When all management tasks are geared towards single purpose, the results are better. They get income forecasts in advance which helps in financial planning. Moreover, they save precious time, energy and money, while the property value continues to rise in their absence.