Hire a Property Management Company and Watch Your Portfolio Grow

As a real estate investor, one of the best ways that you can generate a steady income is by owning rental properties. If you’ve owned income property for any length of time, you know that managing a rental effectively can be financially rewarding. At the same time, you’ve also likely discovered that property management requires a large commitment of time and effort.

The obvious upside to owning rental property is passive income. With owning investment properties comes challenging obstacles that require time and extra money, if not managed effectively and efficiently. Failing to successfully navigate and manage difficult issues inherent to property management can stall growth opportunities and ultimately have a devastating impact on your property portfolio growth.

Here are 3 benefits a property management company can provide:

Keeping an eye on the details:

A good property management company ensures that each and every aspect of your day to day property management is covered. Managing leases and renewals are key functions, as well as handling maintenance issues. One of the key aspects in property management is to ensure that you set the right rental rates, a good property management company will conduct a thorough market study in order to set a rental price for your property. Ensuring that you achieve the perfect balance between maximizing monthly income and maintaining a low vacancy rate.

Experienced property managers are experts at finding good tenants, and will take care of all the details, including security checks, running credit reports, verifying employment, and collecting previous landlord references. Finding the right tenant match is means less turnover, less vacancy, and often, less wear-and-tear to the property, not to mention all the expenses of readying an empty unit for new occupation: changing locks, painting, small repairs, and more.

In addition, a good property management company will run preemptive maintenance checks, which can potentially save thousands in costly repairs. Plus, they often have preferential relationships with tradespeople, receiving quicker service and often better rates.

Maximizing the profitability of your time and money:

By having a property manager take care of the day-to-day aspects of running your income property, your free to spend your time identifying further investment opportunities. Most property managers charge a percentage of your property’s monthly rental rate in exchange for their services. The rate typically runs anywhere from 5-10%, which is generally less than the money you save by hiring a professional to take care of your property.

Increase the value of your investment:

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A lot of property owners don’t necessarily think about their investment goal. Property management firms need to sit down and find out what the client’s intention is for the property. The property managers will then create a strategy around these objectives. This strategy includes everything that needs to be planned and allocated over time, including benchmarks for one year, five years, or even further into the investment. The right property management firm will not only take care of your property, they will also make sure your property value increases instead of the other way around

Hiring a reputable property management company with competent personnel can go a long way to making your life as an investor a lot easier.  It is a great way to protect your investment and increase the value of it while at the same generating more income. To create an ideal scenario, property owners need to ensure that they deal with a property management company who is competent, trustworthy and a good fit for their property.

*According to Property Time, Fadi Nwilati is the CEO of Kaizen Asset Management Services, who are Property Managers for several commercial properties in the UAE in established commercial areas like Dubai Media City, JLT, DIFC and many more.

Hiring a Property Management Company? Read The Checklist!

If you own multiple properties, hiring a property management company will save you a lot of time and money. Property Managers look after your properties and protect you from issues that can impact your revenues and decrease the value of the property. However, finding the right property manager to look after your property is a challenging task.

Many companies, investors and individual owners need property managers to look after their properties for a variety of reasons. You might be living in a different country, but your valuable investment is in Dubai. You may simply be too busy or lack the knowledge and experience to handle this alone. A good property manager can ensure monthly cash flow, increase your revenues and perhaps (most importantly) provide you with peace of mind.

Follow these steps to screen between the good property managers.

Checking the Portfolio

The first thing is to check the number and value of the properties managed. Do they manage units or projects that are similar to yours? If so, how many? In some cases, you may wish to visit some of the projects they manage in order to get a first-hand idea of the management quality. Careful examination of their portfolio will help you select the best property manager and allow you to judge their suitability to manage your building, villas, apartments or commercial properties.

Number of Staff

When you receive proposals for managing the property, consider how many employees are engaged to look after your property. A good property manager can manage the whole building with the support of two executives and an accountant. Avoid companies who do not provide complete information about number of employees that are going to manage your property. Consider whether the property manager will have an onsite office in the building or whether management will be from a remote site. In general, the better property management companies prefer to have onsite offices from which to manage their property portfolio.

Customer Orientation

Customer orientation is one of the most important points on which to focus. Good property managers are customer oriented and listen to your requirements. A good property manager will always try to resolve issues and avoid them reoccurring. Customer orientation is important for both the owner and the tenants of the building. Property managers ensure that owner’s cash flow increases while maintaining a good tenant profile for the buildings they manage. They develop positive relationships with both the owner and the tenant ensuring that their company wins repeat business.

Understanding the Goals

It is very important that the property manager understands the goals and how they will achieve them? It is a good idea to get a plan of action for the manner in which your property will be managed and cash flow increased. A good property manager provides guidance and explains how they can achieve the goals that will maximize cash flow. Dubai real estate market is volatile; a good property management company creates short-term and long term-goals to counter this. Good understanding of the real estate market will help in forecasting and creating realistic and achievable goals.

Understanding of the Local Market

Dubai real estate market is different from other international property markets. A local company has easy access to relevant resources and information compared to international companies. It is also crucial for property managers to have good relationships with the suppliers and the service providers which are more readily achieved through personal contact. A local company will understand the local laws relating to managing their properties. Understanding and complying with Dubai Lands Department and RERA rules and regulation is important so that you can avoid issues arising due to different matters. You can always ask for any registration documents or certifications to understand their affiliation with local authorities and a local company will be in a better position to expedite this.

Use of Technology

Implementation of online systems is very important because less paperwork means less hassle to look after the properties that you own. A good property manager implements online systems to manage your property and conduct day-to-day tasks including preparation of tenancies, renewals, payments and reporting. You can always ask enquire which software systems or CRM (Customer Relationship Management software) they use to manage the properties. How frequently they send reports of all the managed properties from their system. You may also request sample reports of previously managed properties which will provide a useful insight into the property management company.

Maintenance of the Property

The property manager is not only responsible for leasing the property, but also taking care of the whole building. A good property manager listens to complaints from the tenants and the owner and resolves them in a timely manner. A good property management company will keep track of all the maintenance reports in their CRM. You can ask questions about how they handle maintenance requests; A good company may provide you with a maintenance register or reports of previously managed properties.

Budget & Operations

A good property management company always operates within the assigned budget and does not send you bills for extra services. Ask questions to determine the services covered and, just as importantly, those which are excluded from the contract. It makes the selection process a lot easier because a good company will provide you transparent information about their fee structure.

“What should a company look for in selecting an Asset Manager?”

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How Successful Property Investment Advisories Avoid Common Pitfalls

Property investing in Dubai and the rest of the UAE

Should be done ideally by someone with many years of experience in the local market, and experience with property investments, as well as by someone who has a keen eye for the future of real estate in UAE. If that doesn’t necessarily describe you, you should get property investment advice from a company that knows how to avoid the common pitfalls of property investing. But how do they do that, exactly?

Pitfall: Lack of a solid plan

Prevention: A real estate advisor helps to avoid the pitfall of a lack of planning by making sure that the property matches the investment strategy and not the other way around. What usually happens is that investors find a property that they love, or that they think is a good investment, and then try to create a plan around it. What real estate advisories do is help you create a plan and then find properties to match it.

Pitfall: Short-term thinking

Prevention: One of the things that investors think is that they’ll get wealthy instantly with property investment. They are looking for that one property that will make them rich, but investment advisors know that the best investment strategy is one that works for the long-term, not the short. Building a good portfolio and slowly growing your business is much more important than getting rich quick, and much more achievable, besides being much less risky.

Pitfall: Not Utilizing Resources

Prevention: Good investment advisors know that it takes several professionals to make property investing work. You want to build the team that you need including an appraiser, inspector, attorney, lender and of course, a real estate agent. A good investment advisory will help you build the right team for long-term investing, not advise you to wear all of those hats yourself, or worse, skip the tasks that those team members do entirely.

Pitfall: Underestimating or Not Doing Homework

Prevention: Some investors think that they can eyeball a property and tell whether or not it’s going to make a profit. Some think that their 6th sense about investment properties is their biggest asset and so they could end up skipping vital homework that will reveal flaws that make a property a bad investment. In addition, good investment advisors will counsel their clients to double any estimates that they get. It seems difficult to believe, but the double estimate model will usually be closer to the actual cost than the estimate itself.

Ensure High Tenancy Rates: A Guide for Property Owners In Dubai

With the Dubai economy once again experiencing wholesale growth, the prospects of generating and maintaining high tenancy rates among residential properties is increasing.

 

Still, this is only providing the opportunity of increasing tenancy rates and does not ensure a higher tenancy rate. To increase and maintain high tenancy rates, it requires a well-developed relationship between property owners, the property management team, and even the tenants themselves. A well-developed relationship is one in which value is created at all stages and is recognized by all parties to the relationship. Often, the weight of this relationship falls to the project management team to ensure that value is generated and functions in a bidirectional fashion.

Property Management: The Critical Link 

An experienced and qualified property management team functions as a critical link between the tenants and the property owners. Tenants gravitate towards properties that offer value and it is therefore the responsibility of the project management team to maintain that value in order to ensure higher rates and thus a return of value to the property owners. This link is especially vital when the market conditions enter a highly competitive phase such as the one currently being experienced in the United Arab Emirates. Having a property management team that understands the nature of said link can make the difference between high tenancy rates and rates that are below market expectations.

 Maintaining Value For All Partners

Maintaining value for all partners, thus ensuring high tenancy rates, are accomplished by the property management team exercising such services as:

  • Engaging Marketing and Expert Leasing Practices
  • Prompt and Responsive Tenant Management
  • Accurate Document Discipline
  • Precise Reporting
  • Financial Administration with Budget Control
  • Maintaining Corporate Social Responsibility Actions
  • Excellent Facilities Management

It is these services and their related components that ensure that value is bidirectional between the tenants and property owners. It is this value that attracts and retains tenants and therefore ensures high tenancy rates. This generated value is especially important in areas like Dubai, that is seeing a resurgence of growth, and thus the competition for tenancy rates are also experiencing a corresponding rise.

For developers and property owners, engaging the right property management team is imperative to gain and maintain high tenancy rates. For not only the sake of bidirectional value creation, but for the element of trust necessary for this value to even exist. There are property management services that offer template services, but these are not tailored to individual properties and are less efficient at maintaining and generating a well-developed relationship between all parties. In highly competitive marketplaces such as the UAE,  Dubai in specific, a cookie cutter approach to property management will not generate value to its full potential. A properly experienced and knowledgeable property management team, that takes a tailored approach to individual clients and properties, are the best way to achieve high tenancy rates, maintain them, and ensure that value for all partners are flowing correctly.

 

Choosing the Right Agency Service for your Needs

Finding the ideal real estate property ~ whether that’s a commercial building, a villa, or apartment tower, requires more than the ability to finance the property. You need to be in sync with an exceptional agency service that understands your goals. Here’s how choosing the right agency service can help you:

Commercial Buildings

For people with commercial buildings seeking property management services in the United Arab Emirates, it’s important to engage with a real estate company in Dubai that has experience in the region. A great facility management team does more than just take care of daily maintenance problems. You want someone who has an eye on continuous improvement and making tenants happy while building your bottom line. A top-line team will have experience in energy management, build-outs, asset life cyle, maintenance, and cleaning. You need your tenant problems handled in a timely manner and your vacancy rate at zero.

Make sure whatever real estate company in Dubai you contract with has a proper license. The head of the Dubai Real Estate Regulatory Agency warns that some unscrupulous companies are doing business in the city, resulting in headaches for commercial property owners. Licensed property management companies are required to submit a bond of 5 million Dirhams. Unlicensed property management agents have been collecting rent and not passing the funds on to the property owners.

It’s also important to look for a real estate company in Dubai that is familiar with your type of building. Property management needs for an office building are much different than a hospital or restaurant. Go with a firm that understands your special needs.

Villas

Modern villas make popular rentals in Dubai. They’re a good alternative to a hotel for a short vacation, and also make excellent monthly rentals for corporations who need short-term executive housing. Villas can be one or two-stories and share a connecting wall with another unit. They usually have a small courtyard and either a small garage or covered parking space. Because of the transient nature of villa rentals, it’s important to utilize a real estate company in Dubai that knows how to attract customers to keep the vacancy rate low. Good villa property management companies have experience in marketing, locating tenants, and creating iron-clad rental agreements.

Most villa property managers are happy to greet your tenants upon their arrival, collect rent and provide an extensive property inspection upon the tenant leaving. Managers will also take care of all maintenance, arrange photo shoots as necessary and list your villa on websites that attract the most attention. You need to pay a fee for all this service, of course, but it’s a small price to pay for sitting back and watching the monthly checks roll in.

Before signing up with a property manager for your Dubai villa, do a little homework. Get some referrals and follow up with those people. Also check out some of the other listings of the company you’re considering. Do they have quality photos and appealing text? Before you sign on the dotted line, make sure you examine the management agreement and understand the language completely.

Apartment Towers

As the home of the tallest building in the world, Dubai is no stranger to skyscrapers and apartment towers that reach into the sky. Providing a vertical footprint helps make living in this modern city affordable, with rents comparable to smaller cities in America. Because of the large amount of people living in a relatively small area, it’s important to have a property management team that knows how to handle people and the issues that inevitably arise.

A real estate company in Dubai will only be a good apartment tower property manager if it has experience in a number of areas, including marketing, tenant relations, health and safety, financial control, document control, and facility maintenance. It’s essential that a property management team that runs an apartment tower employ people with excellent listening skills in order to understand what the tenants want and what you need to run your building. The best property managers are able weigh tenant problems against bottom line issues and provide a happy and healthy living environment.

Attracting the right kind of tenant starts by running a well-managed property. This obviously includes things like landscaping, maintenance, and overall cleanliness, but also carries over into record keeping, handling late payments and conducting regular inspections. Make sure that whatever real estate company in Dubai you contract with to run your apartment building has no problem responding to noise complaints or interceding in other tenant on tenant issues. By maintaining peace and happiness in the apartment complex, your building’s reputation will rise and so will the monthly amount of your rents.

Things your Property Manager Should Be Doing, But Probably Isn’t.

You may not realize that property management in Dubai is a lot like property management in other places in the world, but there are substantial similarities wherever you may own.

While the Dubai market is a unique place, the fundamental aspects of property management in Dubai are much like those of any rental market. While some property managers seek only to draw a paycheck from your investment, responsible managers have a higher ethical and professional standard that they follow.

Staying Up to Date on Laws

The nature of any growing city is that laws are subject to change on a regular basis, and property management in Dubai is no exception to this rule. As a modern city that is also Islamic, there is a combination of the more traditional and the extremely modern that can be confusing to the uninitiated. For a property manager operating in this area, a lot of information is needed on both official protocols and social customs that could impact being able to lease the property effectively. Any breach in these types of protocols could be the difference between successful renting and having the property go vacant, or worse incurring substantial fees from the local authorities.

Naturally, being a reasonably new market also means that the laws are in a constant state of change. Rather like New York City, which is an established but highly competitive market, property management in Dubai is partially a matter of staying on top of frequent updates to the laws. If your property manager is not constantly reviewing and making corrections to their business practices based on these law changes, this is not effective property management in Dubai.

Acting as a Responsible Steward of Your Money

You have worked hard for your money, and the entire reason you invest in a growth market like Dubai is because you want to grow your wealth. You do not want to purchase a job, and you do not want to sink your money into a losing proposition. Responsible property management in Dubai knows this, and will take pains to preserve and grow your wealth. A responsible property management company will guard your wealth from undue taxes, ensure your deductions are in order, and will make sure you have the best possible tenants as frequently as possible. With a responsible financial steward in place, your property will be more successful.

Communicating Regularly

Regular communications between tenants and property managers are important. By the same token, it is also important that your property manager be communicating with you on a regular basis. These communications should inform you of anything that is happening in and around the property, and you should also be kept informed of anything that might affect your property. Infrastructure changes, new tenants, tenants who have caused damage and new construction nearby can all impact your investment, and effective property management in Dubai both recognizes this fact and works with it to maintain your investment.

Advocating for You

Your interests in Dubai are important to your property and to growing your wealth, and a good property manager knows this. When there is an issue such as collecting rent, dealing with arrears and marketing your property to the best extent possible, your property management in Dubai should be handling these issues every day. The better your property manager advocates for your interest, the better your investment will be protected and the more wealth you will be able to grow as a result.

Issuing Proper Reports

Reports consist of the financial aspect and the physical aspect. Financially, you should be issued at least a monthly report detailing rents received, maintenance amounts charged, utilities, taxes and fees paid, and any other financial aspects that might need to be covered. Physically, anything that involves the property should be recorded and sent to you. Far too many property investors have properties they think are in good condition but that have been allowed to deteriorate considerably because of indifferent management. Property management in Dubai depends on good management to bring in foreign investment by providing superior returns, and a major part of this is delivering reports about the physical condition of the property. Pictures should always be a part of these reports.

Dealing With Professionals

Professionals handle many aspects of a rental property. When an eviction or collection process is needed, your manager must work with an attorney. When there are tax documents to prepare, often quarterly, an accountant is necessary. Your property manager should have this network in place and work with them to make sure you are getting the best return you can while paying the least in taxes and having the lowest level of liability possible.

Good property management in Dubai does a lot for your best interests, while bad property management just limits its own liability.

10 Signs of Poor Property Management

Poor property management costs you more than you think.

There is more to good property management (read our 10 signs of good property management post) than a roof that doesn’t leak. Most property managers tend to think that business is good as long as there’s a roof over the property and the tenants are still put. They don’t consider that it might only be a matter of time before the roof starts caving and the tenants start vacating. These are poor mangers and you should avoid working with them at all costs.

Below are the red flags to look out for in property management companies:

  1. Lack of Support

You should be cautious of property managers that are not supported by other management professionals. Because it means that when the manager is away no one is left looking after the property.

  1. Lack of Repair to Property

This is quite obvious. If a managed property is not in good condition then someone is sleeping on the job. Ensuring a well-maintained property is the work of the property manager. It follows that a delay in repair means there is some negligence on the part of the management.

  1. Constant Disputes May Get Ugly

Building a good relationship with different parties is the first step to the success of the property management company. Constant disputes with the landlord, tenants or vendors and any other parties could mean that the company is not doing its job correctly. A property manager should act as a mediator in disputes, rather than being the cause of the dispute.

  1. Unrealistic Expectations

What about expectations? What do they expect from you? Can you provide it? If the answer is “no” then it’s time to explore other options. The company should meet your expectations as you meet theirs. If one side is heavier and there is no sign of a common ground then the relationship won’t work.

  1. Too Much Control

What is the first impression when you meet the manager? Do they give you a chance to talk or do they exercise total control over you? If they are too much in control then you might need to reconsider a working relationship with them. The property owner should have a say in the way his property is managed.

  1. Unchanging Rents

Stagnant rent prices are a bad sign. Rents should be rising in times of economic rises and even dropping it times of economic downfall, to ensure maximum occupancy at all times.

  1. Complaining Tenants

As obvious as it may be, it’s important to note that tenants do not typically complain for no reason. If there are consistent, recurring complaints that are not addressed by your property manager, your tenants will likely lose patience and leave.

  1. High Repair Bills

A good property manager will have quality relationships with trades people and maintenance professionals and therefore, are able to get you the best deal to minimize costs. Maintenance costs are expensive and can cut deep into some property owners’ profits. Property managers who do not consider costs to the owner are a poor choice.

  1. Lack of Property Investor Qualities

The property manager should possess some skills that would qualify them as property investors. In this way they understand you best and are able to know what you want without having you explain it too much.

  1. Legal Issues

Has the company been sued on grounds of negligence? It is important to mind companies that have been sued before. This could help you avoid being their next victim. Again, you should conduct your own research to know why they were sued and whether it is an issue that could affect your relationship.

Not all property managers are created equal. At the end of the day, it is the responsibility of the owner to select the property manager that they think they can work well with. To ensure a long and mutually beneficial relationship, whilst ensuring consistent and long-term tenant occupancy, take care when selecting a good property manager.

Click Here To Read More About Kaizen Property Management Services

10 Signs of Good Property Management

 

Good property management can keep you making money.

Profitability is usually a factor to look at when it comes to gauging the success of any business. However, when it comes to property management, there are certain signs – some of which may not be very tangible – that greatly show the success of good property management. How many of these does your firm possess?

  1. Low Vacancy Rates

If your property manager in Dubai has managed a low vacancy rate for a long time then you know the property manager has taken the steps to ensure your property remains profitable. This could mean:

  • That the property manager is actively involved in the marketing of the property to new and potential tenants.
  • That your units are generally being sought after.
  • That the management is navigating market rents to maintain current tenants.
  1. Tenants Staying Put

There’s one major reason why tenants would not leave or be showing signs of leaving: they like it there, obviously. A working management makes tenants want to stay in the property because the comfort is what they look for. It’s not because there are no issues but mostly because the issues are actively addressed. If you want to know how well the management is then you need to start from the tenant before you can look at the office.

  1. An Online Marketing Strategy

The digital face of your property, with the help of some marketing, can take your assets to the next level. Therefore, a company that has an active Facebook page or Twitter following, for instance, is most likely working to learn the intricacies of his market. It also shows that the company is reachable due to the multiple digital platforms available for conversation.

  1. Consistent Potential Tenant Inquiries

Even when the property isn’t advertised. We see this as a result of great management. Tenants can be your best promoters if their property is managed with them in mind. That means if you are looking for a great property management company you’ll probably have heard of it long before you consider other factors.

  1. Referals

Ask around. If a property management company gets referrals from other owners, they’re most likely doing something right. Try to find out how long the owner has been using the same property manger.

  1. Certifications

Certifications – whether relevant to your needs or not, show that the property manager is actively pursuing education. Staying active and ahead of the competition is a good sign that your property manger is going to be actively involved in the success of your property.

  1. Being Contacted by Other managers for Advice

It is a good sign if another manager can seek the advice of the manager you are evaluating. It shows that the latter has a considerable level of authority in that field. Therefore, as intangible as the factor may be, it may be a good distinguishing factor if you are trying to decide which of two or more management companies is best for you.

  1. Being Invited to Speak at Events by Associations

Associations and other organizations qualify invitees before they ask them to speak. If a property manager is invited in one of these events, then it is most probably because he/she is an expert in the field. This is to mean that attending such events is a good habit to start and maintain especially if you are actively looking for a good property manager.

  1. Being Approached by Rental Agents

Property managers sometimes in certain areas require the services of agents not only to purchase a home but also to rent one. These agents are paid to know all the properties regarding rent and therefore they have the best overview of everything happening in the market. Therefore, if they approach a property manager it means that his/her property sticks up against competitors.

  1. Enjoying the Work

Enjoying the work is another less tangible factor but it’s important to consider. Property managers deal with a lot of people – from property owners, to the vendors and the tenants. Loving what they do means they have maintained good relationships all around. They work with a mutually beneficial state of mind.

There are many property management companies in Dubai. Some are genuinely good and successful at what they do, but some are plainly dormant. When choosing a company, it’s your responsibility to look at the success indicators. A good property manager is capable, not only of increasing the value of your property but, more importantly, giving you peace-of-mind.

Click Here To Read More About Kaizen Property Management Services