Have you ever wondered what a property management company does? Let us share a few of our duties, which include rental property management and Homeowners Association management.
Things that comes along with rental property management
Each is an important function performed for the landlord.
1. Preparing the property for viewing is key to obtaining good tenants. If the unit is clean, tidy, fresh, and sparkling, it is infinitely more attractive to a prospective tenant than the opposite. Further, it provides the tenant with a taste of the type of landlord they will be dealing with and set an expectation of how the landlord expects to receive it at the end of the tenancy.
2. Rental property management is checking work and landlord references. Also, it can examine creditworthiness, which is essential to finding a less risky tenant. From time to time, a tenant might lose their job, suffer an uninsured or costly injury or sickness, separate from their spouse, or experience some unexpected and huge expense. If their credit is unblemished, they may financially stay afloat during the disaster, while righting their ship. Poor credit and lack of resources will hinder recovery. A poor history suggests more of the same.
3. Inspection and resolution are the keys to superior rental management. Walking a property periodically reveals things that require repair, and timely maintenance is way cheaper than costly replacement. Resolving issues in a timely fashion can lower the temperature between parties. By the time of trial in court, temperatures are at a boiling point.
4. Proper accounting practices with open availability of records is key. Our customers have 24-hour access seven days a week to their financial history online. While many do not choose to check, they perhaps sleep easier than wondering if their funds are safe in someone else’s trust account. We also carry a fidelity bond in the case of misappropriation by any employee.
Homeowner association management
Property management company can take over HOA management. It is similar to managing a rental property with some additional work. The owners usually have been organized as a non-profit corporation under the Davis Stirling Act of 1985 for common interest subdivisions. It means they must file tax returns and file biennially with the State. They have various “governing documents“ that state how they will behave in terms of voting, collecting dues, violations of the rules, and the standard bylaws.
So, the affairs of the entity must be planned, run, and organized, but the members are expected to be guided by a certain code. Governance and communication become sciences or art forms depending on who tells the story. Poor governing and lack of communication are death to such organizations.
The industry that sprung up 30+ years ago to assist in management following some self-management years by these sometimes unwieldy groups is still in its infancy. However, two trade organizations exist for training and education within the industry.
One aspect often overlooked by association is the long term planning for the renewal and replacement of what is known as “common area property.”
It may include the structures if the association is a condo development with such elements as roofing, plumbing, sewer, lines, painting, termites, and in some cases, streets, pools, clubhouses, etc.
One of the perennial difficulties facing owners is the proper allocation of funds for their replacement. Some owners who expect to live within the community might want to set aside funds regularly for a long period. At the same time, those who anticipate leaving soon may have the propensity to defer the cost until a later date. (See related article on budgeting)