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Many people misunderstand the role of the property manager, thinking that it does not extend beyond the collection and remittance of rental receipts, and acting as a buffer between the landlord and the tenant. Little do they realise that a good property manager will generate a greater return from their property portfolio.
So, what should you look for in a property manager? You need a professional experienced in the market. If you find somebody with at least seven years’ experience, then you will have found someone with the skills to navigate the property slump.
A competent property manager will provide many services but the most important is the development of a portfolio strategy. Your chosen professional must be able to articulate and present his thoughts after conducting a thorough assessment of your situation and portfolio. He must be able to provide you with a credible strategy and activity plan designed to harness the true potential of your property and provide you with the maximum rate of total return.
Not just anybody can formulate a credible and implementable strategy. It requires years of expertise and a fundamental understanding of what makes real estate such a worthwhile investment. A true professional will have a strong knowledge base on topics including industry history, current market factors and trends, risk factors and the likelihood of relevant future events that will affect the performance of your in-vestment.
Forming a strategy is one thing but being able to bring the strategy to life is another. You will require an activity plan which will include details of pricing and marketing, customer relationship and tenant management, and policy for the entire portfolio.
This area of expertise is related to the “topline” or revenue generation and management. Equally important are the cost management and maintenance supervision of the property. Many times, excellent “topline” performance is being eroded due to poor operational and maintenance cost controls.
Managing your property portfolio will also require proper performance measurement, communication and review schedules, and status reporting and financial statements. You should always seek examples of these elements as transparency and candid performance appraisals are essential for managing your portfolio.
Furthermore, you need to choose a property manager you can work with and with your best interests at heart. There is no point entering a business relationship that is lacking in mutual trust and respect. You must have confidence in his ability to manage a business – your business.
As with all investments, there will be good times and challenging times. There is no such scenario as “set and forget.” If you do not respect the manager you have appointed, the relationship will not survive the challenging times and you will need to go through the whole process of finding a replacement.
Take your time but invest your time to your benefit. Ask for referrals and call existing clients. Ask to see examples of client reports so you have an idea of their completeness, continuity and timeliness. Ask your property manager carefully-thought-out questions to gauge the depth and breadth of his knowledge.
Ensure the organisation you are dealing with has the resources to support the manager. In times of eliminating overheads, individual performance can be inhibited because of lack of organisational support.
Finally, remember, it’s your investment. Once you appoint a property manager, the ultimate return on your investment is largely in his hands. Choose wisely.
Source: Mohanad Alwadiya, Special to Properties
CEO, Harbor Real Estate