Thinking about investing in real estate? One of the most important things you should know is that in the United States, property management firm is responsible for communicating with the tenant and renting the property, with all that entails. Therefore, when purchasing an investment property in the U.S., choosing a reliable and professional management firm is of utmost importance.
What is important to know before choosing a firm?
1. The property management firm’s responsibilities:
- Finding an appropriate tenant.
- Collecting the monthly rent payments from the tenant.
- Replacing the tenant when necessary.
- Making repairs on the property when necessary.
2. The property management firm earns money in several ways:
- Finding a tenant – 75%–100% of the first month’s rent.
- A monthly fee of 6%–10% of the rent.
- Fees for making repairs when necessary.
3. Why is it advisable for the property manager and broker to be one and the same?
When the property manager is not associated with the broker, the property manager’s interest is to inflate the running expenses and their prices, since this increases the property manager’s profits. Choosing wisely and picking a firm who is both broker and property manager lowers the risk of this type of behavior. The goal of this type of firm is to sell the investor more and more properties, and this will be more likely when the investor is satisfied with the property management company and is assured they will not overcharge the investor on running expenses. This is a classic win-win situation, beneficial to both the investor and the property management company.
4. It is important for the property management firm to know the investor is involved and be aware of the investment at all times. How is this done?
- Get an update of what needs to be done before any repairs are made.
- Get estimates.
- Ask for a photo of the repair needed.
Only after receiving confirmation from the investor will the property manager be permitted to make the repair. In this way, you ensure that your expenses will not be inflated and your return will remain high.
5. Tools for continuous tracking of your investment:
The investor will receive a detailed monthly report, including the income from rent, the running expenses (the property management company’s fees), and any extraordinary expenses incurred (details of repairs made). The report will conclude with the net profit.
Invest in the U.S. and start making money