How does a property management company keep me out of trouble?

admin — Wed, 22 Dec 2010 05:02:48 +0000

Property Management and the Law

A critical element of successful property management is compliance with laws and regulations set forth by your individual state as well as federal oversight. However, even having the most knowledgeable and experience property manager at your disposal, or being an experienced real estate investor yourself, doesn’t make you immune to problems. In certain situations, you may benefit from a lawyer’s assistance, whether it is for representation in a lawsuit or simple advice. Usually these situations have to do with general property management and the law.

Property Management and Eviction

You should be realistic that property management of your rental property could potentially involve evictions. No one likes to evict a tenant, but it might become unavoidable if the tenant’s inability to make timely payments or destruction of your property becomes a risk to your cash flow and investment. The eviction process is very detailed and can become very complicated, especially if issues such as bankruptcy are involved. Because most judges will favor the tenant, it is extremely important to educate yourself on the process, follow the specific steps, and keep detailed documentation. Although many landlords successful evict tenants without a lawyer’s assistance, but it is always better to at least talk with a lawyer in advance.

Property Management and Discrimination

Even if you diligently comply with fair housing laws you could still be accused of illegal discrimination from a tenant who has been evicted or been turned down for renting. However, being accused and being sued are very different things, and you will probably want to consult a lawyer if it is the latter. Going to court can be extremely expensive, in addition to violation fees if you are found guilty. In addition, such charges could damage your professional reputation, or that of your investment firm. It is important to educate yourself on the statutes of illegal discrimination so that you do not unknowingly put yourself at risk.

Property Management and Welfare of your Tenant

Effective property management includes the maintenance of the property which is being rented, and it is your responsibility to keep the property up to date with all repairs. If one of your tenants claims he/she was injured because of your property, it will be an extremely sensitive and delicate issue. Especially if you do not believe you are at fault for your tenant’s injury, it is best to bring in a lawyer that is not personally invested in the case.

Property Management and Damage

Similarly to the personal injury scenario mentioned above, it is also possible to be sued for property damage. Tenants can claim ineffective property management of the rental property which resulted in unrepaired utilities that in turn damaged a personal item. An example of this could be a leak in the plumbing which caused massive flooding throughout the apartment. Part of basic property management does include acquiring liability insurance, which would probably be at your disposal. Depending on how large of compensation your tenant is seeking, you may choose to just consult with a lawyer and handle the situation yourself.

As you can see, there are always going to be situations that require some knowledge of the law, and how it pertains to property management. It’s a good idea to learn what is the right of yourself as a landlord, in addition to the rights of your tenants.

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Do you need a property management company?

admin — Wed, 22 Dec 2010 05:00:11 +0000

If you have purchased an investment property and are planning to rent it for commercial or residential purposes, you might want to consider a property manager. If you’re a first time investor, you may not realize how time consuming effectively managing that property can be- you may become overwhelmed in no time at all. Even if you’re a veteran investor, you may think you have enough experience to forgo the expense and manage things on your own, only to find out you’re completely in over your head. Both of these scenarios are fairly common, and a property manager can help you with operations of your property.

Property Requires Commitment

Think about the long-term commitment required of your property- management doesn’t stop with collecting rent. In fact, that alone can prove a headache you do not have the patience to deal with. A property manager can help you deal with the routine management and maintenance issues that will surface quite frequently, especially depending on the size and number of your investment property(s). Other aspects of the job that a property manager can help you with are the back end of operations- bookkeeping, documentation, filing, forms, and portfolio management.

The Value of Your Time

If it’s true that time is money, a property manager can be invaluable. Most likely, you know better than anyone just how true this statement is. The majority of investors has more than one investment opportunities going at the same time, or are employing at a 9-5 job during the day. How in the world will you be able to be in two places at once? If this is the case, having a dedicated property manager that will free up your time to pursue your money making opportunities is not only a benefit, but a necessity!

Location of Your Property

You should also consider the geographic location of your investment property compared to where you spend most of your time- a property manager may be more accessible than your schedule or location allows. Even if you live in the same city, your property may be on the complete opposite side of town than your office or home, requiring a minimum of a 1-2 hour commute round trip. On the other hand, you may have invested in a property in another city or state. In both of these situations, it’s practically impossible to effectively manage the property(s) in a long-distance capacity. A property manager can be available to the tenant(s) 24/7, and will have quicker access to resources for emergency maintenance situations.