Many real estate businesses are trying their hand at property management to help boost their businesses and create retainer-like income. However, before you start offering property management services to your company’s clients, consider these dos and don’ts.
- Don’t simply agree to manage a rental property as a favor for a client or friend. Take the time to understand what this means, how it will impact your business and the amount of time you can dedicate to your business, etc. Make sure such services are part of your core business model.
- Do make sure you have a company policy and procedure manual in place that can walk all your agents through the process of how you handle rental properties you manage.
- Do ALWAYS have a management or right to lease contract from the property owner. Verbal or handshake contracts should not be accepted.
- Before renting a property, do conduct a thorough and documented property inspection. You might also want to consider doing a video property inspection of the property and its condition.
- Whenever marketing your rental property management services, do always disclose you are a broker. Make sure you honestly represent the property and yourself.
- Do create a “Touring Policy” for your company, making sure there is a proper check system in place. For example, a female agent shouldn’t be touring a strange man at 8:00 pm and not have told anyone beforehand what she’s doing.
- Do fully check out any tenant before renting to them. You’ll want to cross every “t” and dot every “i” – background check, credit check, deposit, paperwork are all musts.
- Don’t forget the security deposit, or even better, enable your agents to accept Accidental Rental Damage Insurance in lieu of a security deposit. Also make sure you know your state’s laws when it comes to what can be deducted from a security deposit and when it must be returned to the tenant.
- Do know your state’s laws. You’ll want to properly handle all tenant and property owner funds and escrows according to your state laws as well as complete any paperwork specific to your state.
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