There are a lot of people who are still unaware of the things that a property management service can do for them, and this is one of the main reasons why they tend to ignore the idea of hiring one. But if a person knows the things that he can expect from it, it will be easier for him to determine whether he really needs this kind of service or not. For now, let us discuss the basics of a fixed price property management service, including the pros and cons that you can expect from it.

Pros of a Fixed Price Property Management

The main advantage that you can get from a fixed price property management service is that you will be spending a fixed amount regardless of how much money your property could generate. It can either be an advantage or a disadvantage, depending on the performance of the property, but let us assume that it can generate $10,000 per month. If you are going get a commission-based property management, you will be spending 30%, in most cases, of the total revenue, which is $3,000 for this example. A fixed price property management service on the other hand will be charging a lesser, say $1,000 per month, which increase your total revenue every month.

Cons of a Fixed Price Property Management

A fixed price service is only disadvantageous for you if the property that you have doesn’t work well to generate more than what you are going to spend for the company. Everything looks good if your property could generate $10,000 per month, right. But what if you are only generating less than $1,000? That is exactly the problem of a fixed price service; you need to spend the same amount for years regardless of the income that you are generating from it. Aside from this, you cannot expect the company to do everything to increase the income that you are generating from your property, since the payment that you will be making on them won’t depend on the income that you generate from the property.

To make it easier for you to choose, a small property or something that is not performing well would be best with a commission-based service. Those are the huge or are performing far better than expected would be great with a fixed price service. Both option will work for you, depending on the performance of the property that you have, so it would be better if you are going to take it into consideration first.

On paper, investing in rental property is a pretty easy way to make money. You just have to have the financial capital in place, find a good property for sale in a nice area, rent it out, and then wait for the money to roll in. In reality though, it is one tough business where a misstep could result to major financial problems.

For first-time landlords therefore, it would be a great idea to load up on information that would help them manage their business efficiently. For people who are looking to go into the same business, the same applies.

The good thing about learning how to properly manage a rental property is the wealth of information available online. This article for example aims to help prospective landlords by sharing several tips that would serve them well in starting out in this kind of venture.

First of all, you have to be realistic. You might have read about a success story about one person who started out with one small property and is now raking in millions every year from his bevy of rental properties. It is not all about skills and investing acumen that made that success story possible. There can also be luck involved as the recent housing market collapse showed us. Temper your expectation and you would have a clearer head which would make managing any property easier.

Another tip you should heed is to find the balance between your expected earnings and the effort you are willing to put into running the business. If you are a hands-on person meaning you will take on all the load of managing your property, you stand to earn more. On the other hand, if you are looking to hire a rental property management company, you stand to make less profit because you have to pay for their service obviously.

If you are just on the planning stage, you better know the rules first. Familiarize yourself with federal and state laws governing rental properties. If you fail to do this, you can find yourself in hot legal water in the future. Not only that, you would not know your rights as a landlord if you are ignorant about laws regarding your business.

Remember that rental property investing can be a lucrative business and if you want to be another success story, you have to be well-informed before you make your move in the business.

Having established that statutory tenants’ rights are critical to the residential block management process, they are also an important consideration for all of the leaseholders affected. Some of these rights are now briefly summarised below.

Leaseholders have specific rights to receive certain information from their landlord or property block management agents including as follows :

• the landlords name and address.
• property service charges and the right to challenge them
• a summary of costs for the last service charge accounting year
• a summary of tenants’ rights and obligations
• freeholder or block property management agents administration charges
• receive notice of assignment of the freehold.
• a written summary of the current insurance buildings insurance costs which must be reasonable

Other tenants rights include various entitlements to

• form a Recognised Tenants’ Association
• challenge their liability for any part of the service charge they feel is unreasonable
• vary a lease on certain specific grounds
• consultation on certain qualifying works and long term agreements
• arrange for a management audit of all the management functions
• inspect the insurance policy and to receive information about it
• appointment of a manager by a LVT if tenants believe the block is poorly managed or the landlord cannot be found
• take over the property management of the block of flats themselves
• Right to Manage or RTM – subject to qualifying criteria
• leaseholders may appoint block management agents under the Right to Manage (RTM) provisions
• apply to the county court to acquire the landlord’s interest – only applicable in extreme circumstances where the landlord is in breach of its obligations
• enfranchise or extend their lease
• first refusal on disposal of a block of flats or freehold
• security of tenure at the end of a long tenancy

As you wold expect, the above list is subject to conditions exclusions, qualifying criteria and exceptions however it is hoped this will serve as a good point of reference for further reading.

The key to properly addressing the above legislation is to employ the services of a good property block management agent.

The RICS Service Charge Residential Management Code sets out what is regarded as best practice for property management agents in the private residential leasehold sector. It also highlights any legislative requirements that block managers need to comply with and adequately covers requirements to comply with the above statutory rights.

The services of any practising managing agents should therefore meet the standards set out in this code. If not, questions should be raised and he leaseholders, landlords, RTM’s and freehold property companies might well be concerned.

There are of course always those management agents or freeholders who will simply refuse to take effective action or responsibility for quality standards and are happy to muddle through. Wherever possible you should avoid these firms.

Staff are often poorly trained, not fully aware of codes of practice and standards, and are not always sufficiently qualified or experienced to meet clients’ needs.

In instances where leaseholders are intending to apply their rights and wish to pursue some of their entitlements it is essential that the property manager is experienced and well informed. Problems and expensive liabilities can soon arise if these rights are not properly attended to..

Additional information concerning lease management legislation and statutory rights can be found online and through the links in the Resource Box below.