Property management is the process of managing a rental property by attending to the day-to-day activities centred around the property and is the key to maximising the return on your property. It is divided into two main components: tenant placement and rental management.
The success or failure of your property investment begins with the placement of a quality tenant. To achieve this, you will:
• Value your property’s rental amount. Compare your property with other similar properties marketed for rent in the same location.
• Prepare your property to the required standard. This includes cleaning and completing required maintenance.
• Advertise your property to prospective tenants. Take quality listing photos, put together an attractive property description and place this in applicable advertising media, such as internet property portals, printed and online classifieds.
• Manage enquiries from prospective tenants and arrange viewing appointments. Arrange access to your property with interested tenants and agree on times for viewing appointments.
• Screen your tenants. Interested parties will need to go through a tenant screening process to determine whether they qualify. They will submit your filled-out tenant application form with various required documents. Screen the prospective tenant against your screening criteria to evaluate their ability to afford the monthly rent, including performing a credit check and conducting reference checks.
• Prepare your lease agreement and other required documents for signature. Prepare the lease agreement and meet with your new tenant so that both parties can sign it (and where applicable, additional documents, such as body corporate rules).
• Onboard your tenant. Once your tenant has signed their lease and settled their required monies (security deposit and first month’s rent), you will ‘onboard’ your tenant by conducting a joint inspection of the property and handing over the keys on the agreed date of occupation.
Once you have placed a quality tenant, your next key to property investment is the consistent management of your tenant and your property (‘rental management’). You will:
• Bill rent, utilities and any other charges to the tenant each month. The utilities and other charges are according to bills you receive from the body corporate and/or the local municipality.
• Receipt the rent and other monies billed. If these amounts are not receipted by the first of the month, you will follow up these late payments according to your predetermined late-payment procedure.
• Attend to tenant complaints and queries, and enforcing lease compliance. There may be occasional complaints about, or from, your tenants which you’ll attend to. Also, enforce correct tenant behaviour in terms of the lease agreement.
• Property maintenance. You will communicate with contractors, arrange their access to your property, approve quotes and quality-control work done.
• Inspections. I recommend that you schedule inspections at least every six months, maintaining records of each inspection.
• Do general administration and maintain necessary records for tax, legal and financial purposes. Besides keeping the required documentation for submission to SARS, maintain a comprehensive and reliable filing system for legal purposes. Manage the property accounts and finances of your property.
• Inspect your property when your tenant moves out. If your tenant vacates at the end of their lease, on the date of moving you’ll conduct a joint move-out inspection. Compare this inspection with the move-in inspection and deduct the cost of damage caused by the tenant (if it exceeds legitimate wear and tear) from their security deposit. You’ll arrange any required repairs or cleaning.