Rental properties bring in the income which acts as the lifeblood of the landlord’s business. A downfall in the process of regular rent collection can result in the business to eventually become weak and die.
A proper rent management company would have a regular and proven mechanism of collecting the right amount at the right time each month from the tenants. When appropriately performed, this is what allows all the top real estate investors to attain a higher than average return on investment.
Herein below you would find the different aspects that ensures that the rent setting and collection process is proper and error-free:
Rental rate setting: Determining the rental rates-There are some important questions that need consideration while determining and setting the rental rates. As the rates for different rental properties are different, so they need a lot of research and analysis before they could be finalized. So for a property manager to achieve it and also maximize the rents, they require to have knowledge of the local market rates and performances. Besides affecting the rental income, your rental rate can also impact the property’s value. The basic goal of the management company should be getting your unit rented as early as possible.
The positioning of the contractual escalators in the lease- Generally the contractual rent escalators permits the rents to be elevated without the requirement of negotiation, any explanation or notice. As the tenants already agrees to this aspect, so it don’t seem to feel uninformed and they actually feel grateful if the firm decides not enforce the full rate hike.
The frequency of increasing the rents- The ideal interval in which the rental rates surveys are performed and the rise in the rent is activated is annually.
Even on occasions of vacancies or lease renewals they hike may be implemented.
Rent Collection: The process of rent collection- Rent collection is the most important part of a rental process. Dispensation of lesser cheques can improve the cash flow and saves both your time and money. This would help you know that whether the funds are there or not and you can eliminate the possibility of the excuses of cheques lost in mails. Some management companies have the process of direct debit for tenants, this is a great facility that you should look for at first place.
The grace period offered in case of rent due- The standard grace period for rental properties is the second day of the month which can be extended till the third or fifth day. If you keep it short, it would help prevent significant delay in the rent receipt in the event of a holiday or long weekend.
Dealing with bounced cheques- Bounced cheques are actually warning signs for more upcoming trouble from the tenants. So you have to keep an eye that after the first bounced cheque, the tenants are not allowed to write personal cheques until at least six months of good payment history has been established.
Furthermore, a provision in the rental agreement which says that the tenants agree to pay the maximum the law allows for all returned cheques would surely be beneficial.
The process of handling evictions- A proper rental property management service would always follow a process that is well documented for handling with evictions. Though the best course of action varies based on the different situations but these documents help you explain the basic checklist that is ought to be followed.
Leon Grant has performed a series of interview with many property and asset management companies around the world. From all these interviews he established that the demand for rental property management service is huge as they provide all types of facilities required in maintaining properties and assets.
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