Putting your flat on rent in another city? Get a property manager
Get a property manager to keep a track of your faraway property - maintenance, tenant complaints, paperwork and everything else under the sun. Just be sure you get timely updates and set a budget.Updated: Jul 30, 2019 12:19 IST
Being a long-distance landlord can be tough. Living far away means you can’t always ensure if tenants are following lease terms or if your broker is actually working in your best interests. And in case of a maintenance emergency you can’t just zoom over to assess the damage to your property. Then, there’s the unending paperwork and asking relatives to go over for regular inspection.
So far you had to go through the rigmarole of managing your faraway home yourself. Now you can actually hire a property management agency to do the work for you. A property manager is more than just a broker or caretaker of your property. The position involves a range of functions.
Typically, his/her job is to help you with the rental processes – get a vacant property rental-ready, advertise it, shortlist tenants, carry through background checks and finalise the deal, help with rent/utilities collection, keep track of all compliances including repair and maintenance of the property, and even do all your paper work. “Such a professional can be godsend, and actually add value to your property and leverage your investment,” says Santhosh Kumar, vice chairman, Anarock property consultants. “But choosing the right property manager is key and the hiring process requires a certain degree of due diligence.”
Evaluate your manager’s real estate portfolio and market reputation. In India, since residential property management is still in its early stages, consider looking at reputed companies and players.
In 2017, Yuvraj Jayasheelan, an IT professional in Bengaluru’s Whitefield neighbourhood, hired the services of property management company Nestaway, after they helped him rent out a rental property in another part of Bengaluru. “I have worked with brokers and rental-listing agencies but their responsibility ends once the tenant is finalised,” he says. “Property management, on the other hand, provides you end-to-end service, including carrying out sundry chores like cleaning, plumbing, tending to electrical issues, tenant complaints and even society associations.”
Kumar recommends working out clear expectations before you start looking. “Then ensure that all the services you’re looking for are covered in your contract,” he adds. “Consult a lawyer before signing any contract with a property management company to ensure that you get a fair deal.”
Keep the channels of communication open. “Even if this is a hands-off approach to managing your property, insist on timely updates,” says Ismail Khan, senior vice president of business at Nestaway Technologies. The company started operations in 2015 in Bengaluru and now covers 13 Indian cities. At Nestaway, clients are updated in real-time about any activity carried out on the property through an app. Firms typically assign property managers to act as the single point of contact between the owner and the tenant for this purpose.
“The second thing to do before engaging with a property management firm is to create a fund for repairs and maintenance,” says Dinesh Wadehra, managing director, property and asset management, JLL India. “Property managers must be transparent about maintenance and you shouldn’t end up paying more than the actual cost of repair.” A quick check with a local vendor can help you verify costs. It is also advisable that a landlord consults with an insurance broker before he signs the deal.
And remember to settle on a flat fee with your property manager in advance. This typically ranges between 5 to 20 per cent of the monthly rental value. Since the residential rental yield is low in India, the services come at very reasonable costs. “So, instead of trying to find the cheapest service, it is important to find one you can trust, says Sapna Chandiramani, co-founder and director, Property Angel, a property management firm with operations in Bengaluru and Mumbai.
“Apart from this, any other service requests should be charged either to the owner or the tenant, based on the agreement.” says Khan. The charges should be pre-approved by either of the party and must be at the market rate.
“Initially we were not too clear on the difference between pure brokerage and the more comprehensive suite of management services,” says Ashish Sabarwal, a resident of Singapore who hired the services of PropertyAngel, for his rental properties in Bengaluru. “But now, I don’t think much about my property and just enjoy the monthly rent.” The key to trusting your property managers is understanding their systems and processes.
There are challenges too. “One of the areas landlords should steer clear of is micro-managing the service provider and holding the controls at every level of maintenance and day-to-day activities,” says Khan. The biggest mistake customers make is by cutting corners on essentials of compliance and health and safety standards. ”This may put them in problems at a later stage. Hence, the decisions should not be driven purely on costs involved.”
First Published: Jul 27, 2019 18:11 IST