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Tuesday, January 24, 2012

Some Key Aspects to Consider Before You Sign a Property Management Contract

By Peter Leroux (Toronto)

Here are a few tips to consider when signing a management contract with a Property Management firm.

First and foremost, consider the experience of the firm as it pertains to your particular property or portfolio. Does the firm have the expertise, people and systems to meet your specific real estate requirements? Have you determined what management, financial reporting and technical support you require, and is the firm a match for you?

Retaining a Property Manager that operates through a hands-on approach is a must. Make sure that the Property Manager will be available to physically be present at the property as needed. There are situations where Tenant-Landlord relations can become strained and issues tend to escalate without the presence of a physical body to represent the Landlord. Remember that the Property Manager works in the best interest of you the landlord. So this hands-on approach is definitely something you should ask for. Paralleling this approach, defined roles of the Property Manager should be clearly stated in the management agreement. This simply ensures the correct management of expectations in an array of situations, and works in both party’s best interest. Also, having a hand in the process of selecting the actual manager who will be overseeing your particular property is very beneficial. It’s important to know that, credentials aside; the property manager has a personality and work ethic that you can see yourself working with.

Clearly outlined deadlines, is another key aspect that you should put in writing, especially when financial reporting is part of the manager’s responsibilities. It is crucial to outline the timing and deadlines for monthly and annual reports. Again, this ensures the management of expectations, and keeps everyone involved and on track.

Another key notable is the Head Office support at the management firm. Recognizing the complexity and demands of managing real estate, management is more than just a one man show. Going back to my opening remarks, does the firm have the expertise, people and systems to successfully meet your specific real estate requirements?

Signing a property management agreement will work to your benefit if you remember to choose carefully, and to ensure that what you set out to achieve, is realized. Having done your due diligence, you can now rest assured that your real estate portfolio will be well taken care of.

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