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Benefits of Setting Clear Expectations
There are several tangible reasons why you might choose to hire a property management company. These mainly boil down to controlling business-related aspects such as regular maintenance, daily operations, and administrative needs of your rental properties. But have you made such expectations clear? It’s important to set clear expectations with the team from day one to stay on the same page. In our experience, setting expectations and coming to an agreement on the way forward builds trust and allows you to focus on strategic activities that will bring success to your property.
Why you need to clarify your expectations in property management
Investors with extensive investment property portfolios might find it challenging to handle multiple single units. Screening prospective residents, managing routine upkeep, and emergency maintenance of the properties are time-consuming. Besides, finding reliable residents amidst the growing regulations in the real estate industry intensifies the challenge. Outsourcing property management can add substantial value to your investment, but only if you clarify what you expect from the property management team.
Though property managers have the expertise to conduct these duties with diligence, setting outright expectations is important. It ensures the investors’ interests and requirements align with the management team’s performance. Here are some key benefits of setting clear expectations:
- Successful implementation of the agreed duties
Set realistic goals and define key variables to draw a clear picture of what you’re trying to achieve as a property investor. Outline precise duties and procedures so that the property management teams’ actions will line up with your overall objectives. - Elimination of differences and losses
Everyone has a different style of working and doing things. If you have specific ways of handling or doing things, it’s always best to be vocal about them. Setting ground rules and boundaries will eliminate the chances of potential losses and disputes. - Deciding on emergency plans
Developing a plan to handle emergencies can be critical. It’s important to outline how to respond to a situation and keep residents involved and informed. It’s also good to go over services/recovery partners who will be on-call for specific emergencies. - Strengthening resident -owner relationship
Ensuring a solid resident-owner relationship indirectly depends on the property managers. They need to convey all your terms and conditions to the residents from the beginning. If the residents understand all the requirements clearly, the resident-owner relationship will stay smooth over the long run.
Best practices to set the right expectations with your property manager
The global property management market is expected to rise from $15.10 billion in 2021 to $28.21 billion in 2028. Amidst this massive growth, investors must follow the best practices to yield higher rental profits.
- Detail all the responsibilities of your property manager
The contract may lay out the required duties, but you must also be aware of the implementation processes. Will the team appoint their own staff for maintenance or involve a third party? As a responsible property owner, gather detailed information and convey your conditions on procedures such as :- Timely rent collection and following-up on delays
- Searching for reliable residents and filling vacancies
- Handling resident grievances and ensuring a comfortable stay
- Regular inspection and suitable maintenance of the property
- Discuss the pricing expectations
Although pricing is one of the primary factors investors discuss with property managers, a deeper dive is crucial. Conduct thorough research on current property management market rates. Once you gather substantial information, clearly convey your expectations regarding the final pricing.
Know that some management teams will lay forward counter conditions. Make sure to communicate clearly and reach a common ground of understanding from the beginning. Layout the terms on the basic fees, additional charges, bonus (if any), and payment schedule. - Decide the channel and points of communication
Even after you are clear about the management team’s plan of action, make sure there are regular reviews of the work done. This will keep you updated on your property’s condition and whether your residents are satisfied.
Clarify things like frequency of review meetings, requirements of updates, and mode of communication. This will also ensure the team fulfills its duties on time. While frequent interaction is not required, a lack of communication can lead to serious misunderstandings. - Acknowledge their expectations from you
Even with a responsible management team, you still have certain duties as the property owner. Let the property managers state what they expect from you, including the following tasks falling under your roles.- Timely approvals:Outline the types of major repairs and maintenance that will need your approval. While the team will not pester you with the nitty-gritty, they will ask for your okay on key projects. . Make sure to review requests and approve or provide direction in a timely fashion.
- Necessary payments:From the property managers’ basic payments and incentives to the reserve funds for emergencies, these finances are your obligations.
- Insurance and taxes:Property owners must pay the essential property taxes, utility (water and electricity) bills, community fees, etc. Discuss with your property manager if you will pay these bills or if they will handle payments. Either way, they are your financial responsibility.
Additionally, liability and estate owner’s insurance fall under your duties to cover.
- Go over the basic roles that property managers are responsible for
It’s important to define and understand the central roles that property managers play.- Residents and rent management:Searching and bringing on responsible residents, handling rent negotiations, and overseeing non-payment.
- Supervising renovations:Working with the residents and owner at individual levels for routine renovations.
- Financial management:Regulating property budget, payment, and management of utility bills and payment of overheads. Their overall objective here should be to ensure they are in line with overall financial objectives.
Set all your terms and conditions straight before transferring the management of your property to a company. Even though you will sign a legal contract with a professional team of experts, clear expectations smooth out the process. From the rental basics to budgeting, discuss every property-related topic in detail. . Doing this will ensure the team handles your investment properties exactly the way you want. Additionally, listen to everything the management has to say and reach a common ground. Be open to their expertise and advice on optimizing your property, investing in renovations, adjusting rent rates, upkeep and maintenance.
Maximize your Rental Profits With Beach Front Property Management
We at Beach Front Property Management are a full-service property management company capable of handling multi-asset real estate portfolios. Our expertise lies in effectively and efficiently managing the micro and macro aspects of property management, working for your property’s financial success, and freeing you from daily operations and routine maintenance.