Short on time or confidence when it comes to administering and maintaining your rental properties? Hire a property manager to help out. Be sure, however, to choose one who is a professional manager. Most will have accreditation from one of the two major industry associations, the
Institute of Real Estate Management (IREM) or the National Association of Residential Property Managers (NARPM). In general, NARPM is for those who specialize in managing single-family and smaller residential properties, while IREM is for those who specialize in managing large rental or condo complexes.
When you interview potential property managers, be sure to ask each of these eight essential questions, which are based on information from the IREM Web site:
- How long have you been a property manager?
- What is your educational background?
- What professional designations do you hold? Which professional organizations do you belong to?
- Do you have experience in this particular market and with this type of rental property?
- Can you show me specific examples of asset improvement you have achieved on other properties you have managed?
- Can you give me some professional references from other properties you have managed?
- What are your fees to manage my property and what services do you provide?
- Can you provide a sample management plan showing me how you think my property should be managed?
Management Plans
The management plan is a blueprint of how your building will be run. It usually contains the following information:
- Regional analysis
- Neighborhood analysis
- Property analysis
- Analysis of alternatives (for example, operational changes, structural changes and suggested changes in property use)
- Cost-benefit analysis
- Conclusion and recommendations
Management Agreement
Professional managers usually sign a management agreement with property owners. Before you sign a binding contract, be sure it spells out the following:
- The relationship between the owner and the manager
- How long this relationship is in force (time limit or dates)
- The specific authority of the property manager and the services to be offered
- The exact fees for the management services
- The property management procedures and policies
- The limits of the property manager's authority (it should define what this person can and cannot do)
- Any financial obligations of the property owner
Before you let any property manager or management company work for you, check references and any affiliations or designations they claim to have earned. You might be surprised at the number of people who cheat on their accomplishments.
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