How to choose the best letting property management agency
MAIN IMAGE: Pearl Scheltema, CEO, Fitzanne Estates
It’s just as vital to pick the right letting property as it is to pick the right location, property type, and rental rate for your investment property. However, the necessity of a good letting property management agency appears to be frequently overlooked, and many landlords end up unhappy and regretting their negotiations. This does not have to be the case. All you must do is conduct your research to ensure you select the best letting property management agency you can find and afford.
Mafadi Property Management with offices countrywide, says there are basically four reasons why a professional renting agency is of the utmost importance:
- to maintain your property
- to increase the value of your property
- to find wanted tenants
- to gather rent and take general care of the wellbeing of your tenants.
These are the bare basics of any rental agency, if you find yourself with a current rental agency that is inept in any of these 4 main duties, it would be recommended that you consider finding a new rental agency, worthy of your business.
Fitzanne Estates also offers full-service letting property management and knows what to anticipate from a competent letting property management agency, making life easier for landlords and property investors.
Finding a competent letting property management agency for your rental property through word of mouth is a terrific way to go. However, be aware that the person you approach for a referral can be prejudiced in favour of a particular firm or service. As a result, it is a good idea to seek referrals from a variety of sources to find a firm that is suitable for your needs.
A Mafadi spokesperson said there are 2 types of mandates available to landlords – an introduction option or the management option.
An introduction option is often what DIY landlords go for, this will include the usage of an agent simply for finding, showing and finally signing the lease agreement with you tenants. This will generally cost you as landlord a month’s rent in commission. This will leave you as the DIY landlord to collect the rent, manage the building and the tenants and can be a timely and costly exercise.
The second option is that of full management where a company will not only find, show and sign with your tenants, but they will manage the building, the tenants and the collection as well as payments of bills. It is important that the landlord and agent has an agreement on what is expected from each other.
A certified fidelity fund certificate issued by the Estate Agency Affairs Board(EAAB) is required of the managing agent. Managing agents are estate agents, according to the EAAB definitions, and must thus be registered members of the EAAB. They must contribute to the EAAB’s fidelity fund if they maintain a trust account. This fund exists to safeguard the body corporate from theft and fraud.
The Ombudsman is intended to regulate managing agents once the Ombudsman Act is enacted.
“It’s also a good idea for the managing agent to have its own Fidelity Fund Certificate. This policy protects the letting property management agency from employee theft and fraud, as well as providing further protection for body corporate funds,“says Pearl Scheltema, CEO of Fitzanne Estates.
Make sure your managing agent is a member of the National Association of Managing Agents (NAMA) and hence follows a rigorous code of conduct.
The Debt Collectors Act of 1998, number 114, went into effect in February 2003. The Act stipulates that no person may conduct debt collection business unless he has been duly registered with the Council for Debt Collectors created by the Act. Confirm that your managing agent is registered with the Council for Debt Collectors – without this membership, the managing agent is not legally allowed to collect arrear levies. Because Trustees are usually volunteers with other occupations, managing agents should be familiar with the Sectional Titles Schemes Management Act and Regulations and should advise them.
Finding quality tenants is one of the most difficult challenges that property investors face. These are the tenants who are courteous, responsible, and always pay their rent on time. Quality tenants are priceless. They simply help your finances work more smoothly, always maintaining a solid cash flow.
Most of the time, good tenant screening results in quality tenants and all you need to know is how to screen your tenants.
According to Mafadi credit checks are essential for any landlord, making sure you tried to be as thorough as you can, will give you that extra piece of mind. They would recommend that even if you don’t want the full management mandate, that you use the introduction mandate for their credit check features.
Rental agencies have an advantage that no DIY landlord could have, simply because they have access to credit check information us normal folks couldn’t have. Credit checks are important, even if it only to see that your potential tenants has been paying their bills, and don’t drown in debt.
“A professional letting property management agency will detect if rent payments have not been received or if there is an issue with the tenant right away and will begin negotiations to resolve the situation. It is proactive efforts that result in defaulting renters leaving the landlord with minimum or no financial losses.
“In most cases, proactive rent collection eliminates the need for eviction, but if an eviction attorney is required, and the agent has retained all correspondence with the tenant, the proceeding will be less confusing, faster, and maybe less expensive,” she says.
According to Mafadi a deposit can be held by the rental agency or the landlord, but it is important that the deposit is held in a well-managed interest bearing account.
“There are however the advantage that if the rental agency where to keep the money, you can be assured that the deposit will be there when needed. Many DIY landlords make the mistake to use the deposit, causing future problems of repayment, making life difficult for themselves. If you are a DIY landlord, then just go open a new savings account, this will be an investment feature to your rental business.”
Professional letting property management agencies do not demand unreasonable fees and are upfront about their costs. You should find out how much your prospective letting property management agency charges and what that includes. Every business will handle its finances differently but knowing what you’re paying for is essential.
Taking the effort to make sure that all parties are aware of their responsibilities and expectations can help your investment property succeed.
The key benefit of working with a letting property management agency is that you get access to their systems, methods, and agreements, as well as professional help when needed. Once you’ve found a decent agent, you should be able to relax and let her take care of the rest of the renting procedure.
Choosing the correct rental agency is just as important as choosing the correct location, property type and rental rate for your investment property. However, the importance of an excellent rental agency seems to be often forgotten and many landlords find themselves frustrated and regretting their discussions entirely. This need not to be the case, you simply have to do your homework in ensuring you choose the best rental agency that you can find and afford.
It is important that your rental agency has a good understanding of the management of your property and tenants. You as landlord has a right to ask where your money has been spent and why, and it’s your responsibility to check up from time to time even if you have a property management company.