1) The Property Manager can be the bad cop when it comes to chasing the rent. This allows the Landlord to ensure swift rent collection while hiding behind the Property Manager. Cash is King in this tight credit market, good cash flow for a landlord can mean the difference between success and failure. If you don't believe me just take a look at the major real estate funds. As at December 20th 2007 they are facing lots of redemptions (people withdrawing their cash from the funds). This is a vicious circle that I predict will continue in a downward spiral over the next 6 months. These funds will have to offload property to free up cash to pay these redemptions. They will in my opinion have to continue to devalue the funds (until confidence is restored) to ensure they do not pay out at the higher price and to discourage people from cashing in. The property manager can assist with your cash flow requirements and you should set the PM tight rent collection benchmarks.You should also incentivize the PM to maximize "additional income generating activities". both of these activities can be undertaken without the landlord spoiling their relationship with the tenants.
2) The experienced professional property manager will have managed dozens of similar properties to those contained in your portfolio. He may be an expert in a particular aspect of property management (such as Health and Safety compliance) and if not he will have access to these experts. These may be colleagues the PM can draw on or individuals he has used before from other firms.
3)The PM will have excellent property law knowledge and could save you $000's by advising you how he (or another clients solicitor) has dealt with historic legal issues that you currently have a problem with. This could be enough comfort for you to resolve your problem without the need for you to pay your solicitor for advice.
4) The PM will have access to the best real estate professionals, leasing agents, solicitors, architects structural engineers to name just a few in his geographic location for your property type and will be able to give you an impartial and independent opinion on who he thinks can solve your problem or shift your vacant space the fastest.
5) The PM's firm will have professional liability Insurance. There may be times when a claim will be referred to his insurer instead or yours thus keeping your Insurance costs down.
6) Let the PM's firm pay for the paper,photocopier,fax,phone envelopes postage,stationery etc etc for invoicing and dealing with tenants instead of you paying for it. On a large portfolio this can be a significant cost saving.
7) Make the PM's firm responsible for vetting your vendors/ suppliers. Failure to properly vet vendors can be a costly mistake. Many Landlords overlook this duty because either they do not know how to do it or because it is a time consuming and laborious process.
8) A PM should only be charging around $1500 per tenancy per year.Consider your legal costs and compare and contrast the value for money!
9) Make the PM responsible for preparing frequent written inspection reports for each property. Faults in property that are found quickly can be resolved before they become expensive items of disrepair.
10) Free up your time for doing deals that make money..I mean serious money.
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