Beginning to manage a property is far more than just receiving rent off a tenant and calling a contractor out when the building needs repair.
For those that think it’s this simple, they’re in for a terrible shock. This may take time to happen, but at some point it will.
In reality there are lots of different aspects to be looking at, all at different stages, and with different kinds of people being involved in this process.
So getting these all together is more complicated, however the basic steps to doing this are actually simpler.
Get these right, and the rest will follow. Which in actual fact is the whole gist of our Property Management Guide book; to have an overview to then delve in and out for issues as they arise.
The 6 Simple Steps
So here are the 6 basic ingredients to begin managing property. They’re more from a perspective of a managing agent dealing with a multi-let property that has had someone else manage before, just to spice things up and give a worst-case scenario.
In reality things may be much simpler with just one tenant, and you may well be dealing with them directly yourself as a property owner or landlord.
You may also be at the receiving end of a property-management service as a tenant or other occupier interest and wanting to question what is actually happening.
Whatever your situation, these 6 simple steps will help you out.
1. The Handover Information
So right off the bat, make sure you get all the right information from whoever has been managing the property to-date.
If another direct owner directs it can be a little piece-meal, however even a formal managing agent with impressive handover check-lists of information can still often miss the basics.
On the accounts side, you may need to look at an initial float of money from the service charge to begin paying people whilst formal accounts follow, and of course knowing individual tenant accounts and arrears is critical.
Also, try and get the right balance between practical matters and the paperwork. So ideally meet people on site to chat through and discuss the issues at hand, but then be clear on what formal documentation is needed afterwards (there’s a more detailed handover resource here).
2. The Money Coming In
If you have tenants to manage and collect monies from, then it’s essential to get these set up on your system as soon as possible, whether that’s a fancy property-management database or a simpler spreadsheet and accounts system.
Load the data in, make sure it’s correct with names as per leases with as many contact details as possible.
Then focus on being able to raise the next due invoice, maybe for the beginning of the next month or quarter, with all the necessary behind-the-scenes processes like new bank accounts in place.
Finally add on any historic arrears from the previous agent, however these will need carefully checking with tenants in due course as there may well be disputes that you need to clarify with the former person managing the property as soon as possible.
3. The Introduction
Now it’s time to get word out that you’re managing the property, including a formal introduction letter to people like tenants, advisors, and contractors. This can go with other information like invoices and set-up forms, although these may need to go out earlier to let people know.
It’s good to remind people who to contact for different issues, along with any building guides and documentation that are available, notice board updates, and plans to hold any general meetings or updates in the future.
4. The Supplier’s Set-Up
The other side to things is the contractors that you’re going to use, and bottoming-out those that you’re inheriting that will continue and new ones you’ll be bringing on board.
You’ll need to wade through contracts and agreements to see what you have, and make sure all new or old ones are correctly vetted and set up.
Also remember other ‘suppliers’ that are still important to agree and pay other than your more obvious contractors.
So for example, utility providers are key, and will often only process a change of correspondence address to a new person via the existing person – if this isn’t completed and a bill gets left unpaid, you may get nasty threats of disconnection.
On the accounts side, also make sure where supplier invoices are sent for payment, with details like bank account information established and times for approving and issuing payment.
5. The Client Contact
Once you begin getting things up and running, keep the ultimate clients and property interests suitably updated on things. This may be a formal landlord contact if you’re a managing agent, or even other interests like business partners and funders if you’re an owner direct.
Whoever this is, they will tend to either have too much or too little interest with matters. For those with little, although this helps to not have endless requests, don’t then take this for granted; still have a quick update here and there with how things are going even if there are no issues.
For those with too much interest, they may be hounding you for endless updates to begin with, so keep ahead of the game and try to even be more proactive with these rather than them having to chase you on this.
And whenever these updates are, get the right balance of how much detail and formality is needed. Sometimes a full-blown report will be needed, other times just a handy friendly update on matters to make them know things are in a safe pair of hands.
6. The Longer Term
The final part then is a longer-term perspective on matters, often something that can often only be completed a few months into things.
This is typically regarding any long-term maintenance and planned works, and of course how these can be funded.
It may also involve more lease and asset management issues and opportunities, and taking those lower-priority jobs still at some point in the future.
Slick Property Management Steps
Therefore as you embark on managing a property interest, these above 6 steps are the main issues to focus on, and in this particular order as well.
So right from the initial handover to then end up with longer term planning; these will take you through the whole process.
At each step, you can then delve into the detail and make sure it’s all making sense for your own situation.
And then property management becomes a whole lot easier.
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