Tips on how to protect your investment

Tips on how to protect your investmentCarlin Tannen

In the past ten years Dubai has become an investment destination for in-country and international investors wanting to acquire real estate assets. When an investment opportunity converts into an asset, it's vital to manage the property correctly to ensure the highest possible return.

But what should landlords look for in a property management company? They need a reliable, professional and trustworthy organization that provides the best value for money and the highest level of service, while protecting the investment.

Here are a few common questions we are asked by landlords:

- What standard services can be expected from a property management company in Dubai?

The typical services you should expect are:

• A dedicated point of contact/property manager who can act on behalf of the landlord and communicate with the tenant efficiently.

• The company should market the property and secure tenants, ensuring all aspects of leasing are fulfilled, including rent collection and remitting funds to the appropriate parties.

• The company should be responsible for renewal of tenancy contracts and property inspections upon handover.

• Round-the-clock maintenance of the asset and a customer care hotline should also be provided.

Services carried out on behalf of the landlord at an additional charge include utilities registration, title deed collection and filing of legal cases for returned cheques, late payments and eviction notices.

- Are property management services different for villas and apartments?

While villas and apartments have their own requirements, the management aspect remains the same. Therefore, you should always expect the same service and quality from the property management company.

- Do property management companies handle all types of property?

Yes and no. Some companies will provide services for all property segments and others might focus on a specific type. In Dubai you will find property management services available for the following segments: residential and commercial property, retail, warehouses, shopping malls and labour camps. If your portfolio includes a mix of these segments, it is advisable to have one company overseeing the portfolio.

- Who chooses the unit's maintenance company?

This can be at the discretion of the landlord. However, the property management company should have an approved list of vendors for all services. In the absence of a directive from the landlord they should select a vendor from this list, or in cases where the job cost is over a certain threshold, get three quotes from approved vendors and award the work to the lowest-priced provider.

- Are property management services available for landlords living outside Dubai?

Property management companies are becoming more important for international investors, and regardless of where the landlord lives, the same services should apply, unless the landlord requests a specific additional service that would need to be implemented into the agreement between the company and client.

- What can companies do on behalf of landlords when a tenant is violating tenancy or building management rules, for example playing music too loudly?

It is important to ensure there are clear lines of communication between the property manager (acting on behalf of the landlord) and the tenant. It is important for the communication to be in writing via email, and the landlord should be appraised at every stage. For example, the tenant would receive an email from the property manager overseeing the unit; this would be a formal notice of contract violation. If the written advice is ignored, the property management company is within its rights to notify the authorities.

- What are the most common issues property management companies face?

The most common issues relate to the following:

• Landlords wanting to evict tenants without giving a valid reason or sufficient notice as per Law 33 of 2008.

• Tenants refusing to move out of the property even after a legal eviction notice from the landlord is served.

• The landlord increasing rent at the time of renewal without considering the government's rental calculator.

• Landlords often expect their property to be leased immediately. The property manager should advise of the market dynamics and what it would take for a faster turnaround, for example marketing the unit at a more competitive rate.

Important tips

Here are the five most important tips for landlords when selecting a property management company:

• Do your research and ensure the company is registered with the Real Estate Regulatory Authority.

• Ensure the company is reputable and has brand recognition in the market.

• Ask the company to provide client references and some examples of units under its management.

• Know exactly what services are included — i.e. property leasing, sales, marketing, short-term apartment rentals — and if they are being managed under one roof.

• Understand what you're being charged for and ensure the management company has a track record of fulfilling the services offered.

The decision to appoint a property management company should not be taken lightly. As a landlord the company represents you in the marketplace. Therefore, it is wise to ensure all the right boxes are ticked before appointing a property management company.

Ask The Agent - How did the mid-market perform overall in 2014?

Source: Carlin Tannen, Special to Property Weekly

The writer is Portfolio Manager of the Property Management Division at Better Homes


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