Commercial real estate investors like to be in control, but there comes a point where maintaining properties in a growing portfolio becomes too unwieldy. Property investors do not have the time to work on new opportunities while fixing windows, hiring contractors, and chasing after rent payments. In these cases, hiring a property management company is a viable alternative. But what exactly do property management companies do?
1. Property management companies take care of rent
If you have office space, industrial properties, or multifamily residences in your portfolio, property management companies will ensure rent is collected from all tenants at the start of each month, and impost fees on any overdue balances.
2. Screening tenant applications
If there are vacancies in any of your units, the property management company will advertise openings and screen tenants. The application process typically involves tax returns, verification of employment, and credit checks, to ensure tenants will pay their rent and not violate the rules of the property.
3. Property management companies provide maintenance
Property management companies have skilled staff on hand to take care of everything from groundskeeping to electrical, plumbing, window and wall repair, and more. They will also paint and clean vacant units to make them ready for new tenants.
4. Increasing unit occupation
Property management companies operate on a flat monthly fee or via a percentage of the total rent, so it is in their best interest to ensure as many units are occupied as possible. They usually have marketing strategies to attract new tenants while retaining existing tenants as long as possible. They also have strategies to increase rent periodically to improve your bottom line.
Interviewing Property Management Companies
Commercial real estate investors need to remember that property management companies work for them, so it is important to ask key questions and treat the process like an interview before signing any agreements. Do not be afraid to ask a property management company for references or to research tenant reviews online. Ask if they charge for evictions or if they have a threshold for property damages.
Golden Century Lending provides financing solutions to commercial real estate investors. If you are looking to grow your portfolio, contact our offices to learn about our financing programs.