There are three ways of managing real estate:
Often, owners decide to manage their property personally, hiring staff assistants, administrators, and technicians and supervising their work.
With time, however, owners get disappointed with this approach - and not just because constantly being a "one-man band" is exhausting. The main reason is finding out that the property isn't in the best condition, potential tenants somehow keep choosing your competitor, and the old ones start asking for a discount or move out. Administrators and assistants can't handle making decisions, and regulatory agencies put a pressure on their work.
That's when the thought comes - I need a manager!
This option is picked by an owner who realizes that:
— handling everything on your own every day is too much of a headache;
— managing a real estate property requires special qualifications and knowledge.
This approach does make sense. The job market has highly competent professionals able to build an efficient system. However, there are a few problems:
— this person can always decide to leave the company, and if a skilled senior manager quits, be prepared for a part of the team to follow;
— even a qualified manager will have a view from inside a single property. Sometimes, it's not enough, especially during a crisis or when the property becomes obsolete and demands a change of concept;
— you'll still have to take part in fine-tuning the processes and supervise the employees, at least at first.
Usually, owners who have been working on the market for a long time are aware of the limitations of the two previous options. That's why they're looking for a managing company rather than a single manager.
This approach requires minimal engagement from the owner, and only while the property is handed over.
It will save you time and money on tuning the processes, as the managing company already has its own well-running mechanisms and work standards, which they adapt to every property.
