Potential Property Management Challenges and Ways of Their Prevention

It is always easier to prevent any property management issues than to solve problems encountered and deal with their negative effects. This article covers some possible problems in the sphere of property management, as well as solutions to them.

In the context of political and economic instability management companies seek to save money and employ various methods for optimizing costs. To reduce expenses, they actively use new technologies in operating facilities.

Maintenance: Prevention is Better Than Cure

Yet there are some costs not to be minimized. For example, you shouldn’t cut corners on routine maintenance of engineering equipment. Such economy can lead to serious breakdowns, thereby expenses will only rise.

Let us see what consequences may occur if you save on exploitation and devote insufficient funds for this position.

There are two main types of operation:

-  proactive – regular preventive maintenance;

-  reactive – acute maintenance to eliminate accidents.

Often the service is carried out according to the second variant. This way applies to both old buildings and new office centers. Some managers suppose that if the building is new, all the systems are debugged. So third-party specialists are not needed and regular work is not necessary. But in a few years the new systems left without prevention will fail.

Property management company should inspect all major components of the object. They include roof, MEP, heating and cooling systems, etc. Such assessment helps figure out how long these components can serve before they will need repair or replacement. Fixing or replacing worn-out parts before they cause problems helps avoid reactive maintenance and reduces your maintenance costs in the long run.

Quality: Buy Cheap – Buy Twice

Trying to save costs by choosing cheaper materials and less qualified workers is a great and quite popular mistake. If you want to have a top quality property and attract the best tenants, all small details are important.

Search reliable contractors. And when you find them – don’t change them in attempts to find someone with more favourable prices. Make a list of trusted contractors that proved to provide qualified and timely service.

Imagine that some developers are trying to reduce costs. They choose a contractor from the category of those that are cheaper and more flexible. Often such contractors do not have enough experience in building commercial real estate. The contractor can also try to save by using poor-quality materials and unskilled workers. But the lack of experience and qualification often leads to unsatisfactory quality and delay in commissioning. When tenants who have concluded a contract for a specific date learn that the building will not open on time, they may break the agreement. So the object, even not launched yet, already bears tangible losses.

Tenants: Subtleties of Rent Collection

The next important point in the real estate management is a competent approach to work with tenants. To be on the safe side, check tenants’ financial solvency in advance. You can get all necessary information from a rental application form. Pay attention to the job history. Absence of steady job or big gaps in employment can be an alarm bell.

How to make sure that tenants pay rent on time? You can ask for automatic schedule payments or offer online payment options. This will reduce the risk of intentional rent payment delays. It is also a useful option for those who forget to pay the rent on time or are out of the area and unable to hand deliver or mail the rent payment.

To prevent late rent payment from tenants, include the consequences of paying late in the contract. The terms of the agreement should include, beside the exact amount per month, the following clauses:

  • payments conditions,
  • applicable grace periods,
  • methods of acceptable payment,
  • penalties for violation of payment terms.

Experienced property management companies with proficient expertise take into account all necessary points. Correct paperwork guarantees your business legal safety.

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Comment by Vandana Bhatt on October 16, 2017 at 9:37

Thanks, liked and shared, :) Happy posting, :)

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