Property management is a service offered by natural and legal persons for the administration of real estate . It is also known by its English name “Property Management”.
It consists mainly of intermediation and advice on the purchase / sale, lease or transfer of a property . That is, this business is based on delegating property management to a third party. This can be a residence or a commercial or industrial premises.
The objective of hiring this management service is to guarantee greater profitability. This, given that the property owner is geographically far away or does not have the necessary knowledge and / or time.
Functions in property management
The functions to be fulfilled by the person in charge of management, called manager or broker, are mainly the following:
- Take care and preserve the interests of the property owner.
- Search and evaluate potential tenants who occupy the property. This, developing an appropriate marketing strategy.
- Manage the collection of rentals and then transfer the gain to the owner.
- Keep an inventory of all objects that are inside the property before occupants enter.
- Ensure that the propertyis in habitability conditions.
- Monitor incidents that may have damaged the property while the leaseis in progress .
Advantages and disadvantages of property management
Among the most notable advantages of property management are:
- Higher income:A manager, having the knowledge and experience, should be able to lease the property by charging a higher rent than the owner would get.
- Network of contacts:The broker has partners specialized in promoting and renting properties.
- Knowledge of the law:Managers not only know how to sell or rent real estate , but must be instructed on all legal procedures involved in this lucrative activity.
In contrast, there are also disadvantages of hiring a broker
- Management cost:The advisor charges a commission for the service, which implies a cost to the owner. For that reason it is necessary to look for a real estate agent that ensures profitability.
- Loss of absolute control:The owner will no longer have full control over the property. He no longer decides who to rent, although he can agree with the manager certain leaseconditions .