by Robin Trimingham
Landlords who have a rental unit attached to their own dwelling on the whole might well be able to look after things on their own, but those who are elderly, own multiple units in different locations, or are living off island will frequently need to find someone to assist them.
In Bermuda the term “Property Manager” can be used to describe everything from a self-employed handyman to a commercial facility manager, but most often it refers to a real estate professional who specializes in overseeing and managing the daily operations of residential properties on behalf of landlords or ownership groups.
The question is – who is the right person to assist you?
While the primary function of a property manager is to act on behalf of the owner to preserve the value of the income generating property, the actual tasks performed can vary greatly depending on the type of property being managed and the individual requirements of the landlord who owns the property – and can include anything from property valuation, to marketing and advertising, leasing services, rent collection, site visits, bill payment and expense reporting, landscaping, pool maintenance, general maintenance, repairs, hurricane recovery and cleaning services.
In some situations, a neighbour, a relative, or a trusted handyman might be able to assist, but more often than not unless you have the time to interact with your tenants on a regular basis and have enough knowledge of home repairs and maintenance to handle the unexpected, you might well be better off engaging the services of a professional real estate property manager.
“In Bermuda, realtors who offer property management services tend to specialize in either commercial or residential property management,” says David Hyland, Chairman and Salesman at My-Bermuda-House.com Limited, “and our contracts with residential landlords are always customized to match individual requirements”.
THE POSSIBLE BENEFITS OF HIRING A PROFESSIONAL PROPERTY MANAGER ARE AS DIVERSE AS THE SERVICES THAT ARE AVAILABLE.
At the simplest level, a residential property manager helps to find a suitable tenant and then manages all interactions with that tenant as required.
The types of properties can range from single family detached dwellings, to high end vacation rentals, to apartment buildings with multiple units, to condominium complexes.
Often the service provided is as straightforward as collecting monthly rent, but the role takes on an entirely different complexion when repairs need to be made, if there is weather damage to the property, or questions arise regarding the various clauses of the Bermuda Landlord and Tenant Act, or legal action is required for any reason.
It’s important to keep in mind that renting property is a business and an important source of income for many landlords. Getting too personally involved with your tenants can be risky if problems arise.
LEAVE EMOTION AT THE DOOR.
“As with all human interactions, it is important to manage expectations and keep emotion out of the discussion at all phases of a tenancy,” advises Duncan Dawson, Broker at My-Bermuda-House.com Limited. “One of the greatest benefits of hiring a property manager is that they can handle potentially stressful situations in a professional manner on the landlord’s behalf.”
Both realtors agree that enhanced peace of mind is one of the most important aspects of working with a professional property manager.
“We always start with an initial audit of the property to provide a baseline report of its condition and to identify areas that need immediate improvement before placing a tenant,” Mr. Hyland explains. “We also provide a valuation report outlining the optimum rent to charge and establish a regular inspection and maintenance program to ensure that everything is serviced on a regular basis.”
“In our experience this is the best way to keep everything in good repair and to minimize common issues such as dampness that frequently arise as a property ages,” says Mr. Dawson. “Over time we have established working relationships with very reliable contractors and repairmen; and of course, we are always happy to use any vendors that the landlord already has a working relationship with.”
Larger condominium developments also frequently engage a professional property manager because although they typically have a managing board of directors or trustees and lots of owners, often no one person wants to take on the task of actually managing the site,” Mr. Dawson explains. “Because an annual report has to be generated it is important to properly track accounts receivables, accounts payables, and financial statements on a monthly basis.”
Equally, a professional property manager can assist the board in the scheduling of preventative maintenance, capital improvements and repairs to avoid cashflow surprises and unexpected increases to monthly condo fees.
All in all, the hiring of a professional Property Manager can be money well spent, but if you are engaging an individual it is important to be clear what the fees will be and what services are provided up front.
For real estate companies that are members of the Real Estate Division of The Bermuda Chamber of Commerce, the monthly fee is set at no more than 7.5% of the monthly rent of the property being managed.