Property management for rental properties can be a complicated and daunting task, if you allow it to be so. Organization and optimization are the keys to successfully managing your rental properties. Rental properties can be divided into commercial properties and residential properties respectfully.
Commercial properties, as its name implies, are leased out to business owners for them to operate out of. Being a place of business, these properties have needs and are regulated differently than residential properties. This also means its management operations are also slightly different from residential properties as well.
Property Management for Commercial Rentals
Assuming you are developing for a commercial property, you need to be up to date with the latest laws and regulations concerning zoning ordinances. Some area’s in cities are specifically zoned for residential or commercial developments. Once your properties are constructed in their proper zoning district, you can now start looking for clients.
Vetting Clients for your Commercial Property
Typically, since the average commercial property developer will produce few unites compared to residential units, the commercial developer should be selective on who they allow to lease their property. Capital for new businesses can be scarce, and as hard as that is on the potential entrepreneur, that isn’t your problem. You need to make sure they will have the capital available to pay for the term of your lease regardless of how their business venture does. This can be achieved by running a credit check on all of your potential candidates, and inquiring about their past business ventures if they have any.
Leases and Fees
Once your candidate has got the all clear, and you two seem to be on the same page, it’s time to start discussing the lease and the terms that will be set within it. There are all kinds of legal liabilities that may all on the property developer if particular concerns are not spelled out specifically within the lease. Business have a responsibility to operate within the confines of the law and also the confines of ethics. Being a property developer, you most likely won’t have the time to babysit your clients to make sure they are following the law within your properties. You need to spell out in your lease what the clients responsibilities are and what exactly they are allowed to do in regards to their business while they exist on your premises.
Also your tenant should have clear expectations from you laid out in the lease as well. As the property will belong to you, the property developer, maintenance and routine upkeep will fall on you. Basic utilities such as water, gas, electricity etc. need to be established and maintained by the property developer. Specialty utilities such s high speed internet, phone,etc can be discussed between tenants and developers, and the rates and fees for these services also need to be discussed.
Property Management for Residential Properties
Like commercial properties, residential property management has a few unique quarks that make them different from commercial units. First of all, the zoning ordinances specified for residential properties are different from those that govern commercial properties. Generally, when we speak of residential developments we are referencing multiple housing units like neighborhoods, or apartment complexes. These ordinances are mostly governed by safety and accessibility issues, and it is the sole responsibility of the property developer to make sure all issues are taken care of accordingly.
Like commercial property management, residential property developers need tenants in their properties, but while an ability to pay rent is important, property managers also need to make sure their potential tenants are also safe. The biggest threat to neighborhood and apartment complexes are tenants who slipped through the cracks who may have records that ay put other tenants at risk. Thankfully property managers have the ability to run pretty through background checks on their potential tenants to weed out people who would not be a good fit for the residential area.
Arrivals and Departures
High turnover is not good for residential property owners, so their management team should know that keeping reliably paying tenants in their homes is the ultimate goal. Property managers can achieve this by streamlining essential processes in regards to their tenants and other operations. These processes include rent payments by tenants, an efficient work order process, and other timely responses to the concerns of tenants.
Online or automatic payments allow tenants the flexibility to pay their rent quickly, and on their schedule, as long as the payment is on time. These systems can be put in place by the property managers via property management software. The property management team also needs to respond quickly to work order request and insure that the tenants know that their concerns are heard and taken seriously. Tenants that are well taken care of, will often stay longer, generating more revenue for the property developers and owners.
Property management for rentals can seem overwhelming at first, but if property developers make an effort to organize and streamline their operations the tasks involved in managing properties can be completed quickly and effectively. An efficient operation is the easiest path to a profitable one. Property managers should be doing everything in their power to to maximize the return invest meant for the property developers and owners that they work for.