For a struggling landlord, a property manager can be a blessing in disguise, helping out in all the difficult tasks a homeowner has to handle. But if you’re not careful, you could end up paying more than what you bargained for. Don’t enter into a property management contract blindly; arm yourself with market knowledge so you have more room to bargain with. With that thought in mind, we’re going to list down a few important things you need to look at before signing a contract and save yourself the hassle. Take a look!
Be vigilant from the start
Firstly, you should know that you have the right to ask for the contract before you sign. When you are in the early stages of searching, ask the property management company to let you see a sample of their contract. This will allow you to select a company based on complete knowledge regarding what they offer. Typically, people wait until they have shortlisted a company to look at the contract, at which point they tend to accept what they get. Avoid doing this, and you will remain a step ahead in the San Fernando Valley.
What you should look for
When evaluating a property management contract, you need to be mindful of certain things. Before you do anything, search the contract for the specific things you required and decided upon beforehand. Many a time, management companies verbally agree to provide a service which they avoid mentioning in the contract. Make sure it is there.
Go through what services they offer and the money they charge for them. Be extra careful about what services you can avail by paying extra, and what services they will not provide at any cost. This is important because if you require such a service in the future, you could end up paying more than the services you require.
The contract should also clearly state how the payment process works for the extra services. Whether it’s a flat fee, a percentage or based on the situation, the company should mention it explicitly in detail.
Another essential aspect to clarify is the duration of the contract. This is important because along the road if you feel the management company is not providing quality service, you should be given the right to terminate the contract. Of course, the termination will be subject to certain conditions, the option, however, should be there.
What the contract should include
Certain things need to be there on the table without reservation. They count as necessary services that you should not have to worry about. Whether they are part of the general services or extra services, the following are a must-have on the contract:
- Management: Clarification of what ‘management’ entails and what it covers along with a detailed explanation of the costs.
- Renting: Typically, the management company has the right to select the tenants for your home. However, you, as the landlord, should have the right to either select or approve the requirements set up by them. If the screening process is not well established, you could run into many issues in the future.
- Extra services: These services depend upon what the company includes in the ‘management’ part and what they don’t. Usually, things like maintenance, repairs, filling vacancies and so on are considered extra services. Ensure that all of them are available to you in case you ever need them.
- Monthly reports: Make sure you get a monthly report of what has been going on in your house. Any extra services that they provide should be made evident in the report.
- Insurance: It is crucial that you have the right type of insurance. Usually, the insurance company of the property manager you sign the contract with has reasonable rates. Try to ensure that your name is on the insurance certificate. You need to know that in case of an accident, you won’t lose money. Also, make sure that in such a scenario, the management company provides you with an appropriate report of damages. It will be useful if you have to present it somewhere later on.
Step by Step
Remember that it is better to be safe than sorry. You should take your time when searching for a reliable property management company, so you avoid future problems. If you do so, you could potentially find a management company with whom you can build a lasting relationship.