Do you have a property that you would like to rent? 360 property management company will find tenants for your property, collect rent and much more. The following information will teach you the questions that you should ask a prospective property management firm. Knowing the questions to ask a potential property management will help you find the best property manager for your property. This guide will teach you which questions you should ask when interviewing a property management firm.
Most property management companies charge a fee based on the gross rental amount. This fee will be between 4 percent and 10 percent of the monthly rent of the property. This fee will pay the property management company for the collection of the rent and other services that the company offers. When discussing the fee for this service, ensure that the fee is based on the collected rent rather than a flat fee each month. This will prevent you from paying the fee if the property is vacant. When discussing the fee with a property management company, make sure you understand which services are included. Some companies will off a very low fee; however, the property management will only collect the rent and nothing more. Other property management companies will charge a higher fee but will provide a full range of services, including tenant placement, inspections of the property, evictions, advertising and handling any maintenance issues. When you consider these extras, you may find that a low management fee is not a bargain after all.
In addition to a monthly fee, a rental management company may charge a fee for finding a tenant for your vacant property. This fee is typically half of the first month's rent. When reading your property management contract, determine if the fee will be refunded if the tenant breaks the lease or is evicted. If the property manager is unable to find a tenant within an agreed upon period of time, the fee should be waived. You will also need to determine how the rent will be handled. Will the property manager immediately provide the funds to you once the rent is collected or will it be held for a certain number of days? You will also want to know who will have access to the money while it is being held. Make sure that the contract states the day of the month that the funds will be released to you and whether this will be paid by a check or direct deposit. Finally, ensure that you will receive an income and expense report monthly.
When you talk with a property management firm, you should ask to review their management agreement before you agree to hire them. This will help you understand what is included in the contract. Let's take a look at the six parts of the property management agreement that should be carefully read and examined before signing a contract.
1. Fees and Services Provided
2. The Property Owner's Responsibilities
3. Equal Opportunity Housing
4. Liability Clause
5. The Duration of the Contract
6. The Termination Clause
The first thing you should determine is which services will be offered and the fees associated with these services. The management fee will include certain services. Other services may be performed for an additional fee. Furthermore, there may be services that the property manager will not do under any circumstances. Knowing what is and is not included will help you determine the value of the property management service.
Another thing to understand when reading the contract is your responsibilities. The contract will explain what your obligations are as well as anything you are prevented from doing while under contract with a property management company.
There are state and federal laws that must be followed when renting a property including the Equal Opportunity Housing laws that state a potential tenant cannot be discriminated against.
This part of the contract protects the property management company for any damage except for negligence. The property manager will not be held responsible for any negligence done by a third party that they hire. For instance, if a contractor is hired to perform work on the property and damages the property, the contractor will be held responsible rather than the property management firm.
When hiring a property management company, it is best to avoid a long-term contract until the property management company has proven themselves. Most property management companies require you to sign a contract for a year. Read the termination clause in the contract and determine if you will be able to terminate the contract if you are unhappy with the services provided by the property management company.
The property management agreement should have a termination clause. The termination clause will state reasons why the property management company or the property owner can terminate the contract legally. Another thing to look for when reading a contract is an early termination clause should the property management company be unable to locate a tenant for your property in a specified period of time, you have the right to early terminate the agreement.
If you terminate the contract early, you may be assessed a fee. This fee can be a set amount or all fees the property management company would have collected over the contract. Renting a vacant property is a great way to increase your monthly income; however, it can be challenging for a property owner to rent their own property. This is where a property management firm can help. Use the information above to help you ask the appropriate questions when interviewing a property management company and signing a property management agreement.
Social Links: Facebook Twitter Google+ Youtube Pinterest Instagram
Other Links: WordPress Weebly Blogger Wix Livejournal Jimdo Yola Webs Webnode Bravenet Goodreads Rediff Tumblr Angelfire