How property management benefits landlords, tenants
Managing property finances remotely can be hard and this is why many landlords use property management services.
Dubai - A property management contract takes the stress out of property rental
You've probably heard of property management, but do you know what the actual benefits of such an arrangement actually are?
There's a multitude of benefits for both parties involved in the contact - both the landlord (property owner) and the tenant. With more savvy tenants than ever before, many actively seek out rental arrangements made only where the landlord has taken out a property management (PM) contract.
Advantages for tenants
As a tenant, you want peace of mind, right? A property management company takes away a lot of the niggles, hassles and worries that you might have as a tenant. For instance, prior to moving in, a tenant should receive a professional "schedule of condition" report which helps at the end of tenancy in terms of security deposit return. The property will also be checked over and prepared for the tenant (prior to move in) by a dedicated portfolio manager.
A good PM contract will register a tenancy under Ejari - albeit at an extra cost. It's a legal requirement that tenants have an Ejari certification, without which you can't get your utilities connected.
As the main point of contact for maintenance and other general issues, the property manager helps avoid problems of finding reliable service providers, or trying to get hold of landlords in different time zones, for example.
Impartiality brings tenant reassurance too. Having a professional intermediary operating in the space between the landlord and tenant often means swifter resolution of any issues, especially if the landlord has properly empowered the PM company.
If and when you choose to leave a property, the PM co-ordinator will be there for key handover and check out to ensure there are no issues on the part of either party.
Advantages for landlords
In a phrase, a PM contract brings peace of mind. A property management contract takes the stress out of property rental, from initial screening of tenants to transparent management of the financial and legal issues, landlords can relax knowing that there is an impartial third party looking after their property and tenant.
A PM contract makes perfect sense for landlords living elsewhere - to avoid problems that arise through time differences and banking, to name a few. Put a PM contract in place, and you'll avoid calls from the tenant at inconvenient times - such as weekends, holidays and the middle of the night!
You might prefer simply not to deal with tenants at all. Studies have shown that managed properties protect an owner's investment and can achieve a higher rental yield.
In terms of Dubai, look for a Rera-regulated PM company - one which stays up-to-date with the laws and regulations, making sure the tenancy is correctly maintained.
As mentioned above, having vetted tenants on your behalf, an inventory should be taken at the start of the tenancy. You should expect a snag report, bi-annual property inspections and check-in and check-out services to help assess any changes or damage that might have occurred.
Security deposits can be handled from handover to departure by the portfolio manager, as can rent payments, rent collection and any issues arising from non-payment of rent.
With issues over non-payment of rent, you should expect a proficient PM company to handle the legal process, including reporting to the police, serving notice and opening a rental committee. Remember, for your PM to act on your behalf, you might want to consider offering the PM co-ordinator power of attorney.
Here in Dubai, cheques remain the only form of security and a good PM company should manage the financial relationship between landlord and tenant, such as cheque deposits into foreign accounts and deductions of maintenance fees or service charges.
Managing property finances remotely can be a real headache and this is a strong pull for many landlords or property investors to take advantage of property management services. You should expect a quarterly detailed statement of account, so you can clearly and easily keep up-to-date on property expenses.
What a landlord should look for in a PM agent is someone who can ensure the property is properly maintained and monitored to maintain the investment. A well-looked after property is normally reflected by good, reliable, long-term tenants. With a PM contract, your investment will maintain its market value, making it easier to re-let and minimising void periods.
The writer is senior portfolio manager with Allsopp & Allsopp. Views expressed are her own and do not reflect the newspaper's policy.