Offering your property management services is a lucrative business model and can be scalable, as well. However, you need to do things properly, which is why you must learn about a property management agreement to use so that you can grow your rent rolls.
There are many things you should include in the property management agreement form, and we can help you.
Property management focuses on registered Realtors or real estate agents managing rental properties on behalf of investors and landlords in exchange for a monthly fee. The services can include but aren't limited to:
Clients often engage with a property manager because these professionals organize rentals each day. They trust your experience and expertise, knowing that you will get the best results with fewer issues.
However, landlords do have risk involved when handing over the keys to a real estate agent or property manager. Therefore, clients often seek more than one proposal from various real estate agencies before choosing a manager that they feel comfortable with.
The property management contract is crucial for you to secure business ahead of the competition and receive exclusive rights for managing a client's property. Without this formal contract, you're vulnerable to a landlord changing their mind partway through the process.
Likewise, a contract offers you protection because you receive the rental fee in full and on time from the property owner.
Property management contracts are a pathway between the real estate agent and the long-term client. Below, we've listed the best practices a broker can use to make the most out of this agreement.
Generating new inquiries and appraisals is at the heart of your property management practice. In the template, you must list the principal responsibilities and duties you'll do so that the property owner can review them.
The secret is that the information isn't only for landlords. It's a powerful tool that educates your referral engines, including mortgage brokers, strata management, service desk teams, sales agents, and other stakeholders who might benefit from knowing the duties you perform.
Use the contract information to educate partners. When they understand how you benefit the clients, they will be more likely to drop your name when interacting with California landlords.
If you sign a new client because of an interaction or referral, touch base with the one who referred them to you and let them know how it went. This builds confidence and trust in your network to lead to more opportunities in the California market.
With real estate, most property managers charge landlords a percentage of the rental income as the fee. Likewise, the manager is responsible for appraising the rent amount they believe landlords can receive in the current California marketplace.
Before writing the fees on the contract, make sure to inspect the property and research it to get a better idea of what you should charge for your services. You will generally be required to make repairs on behalf of the property owner, and you want to ensure that they are within your budget.
Landlords wish to get a higher rental income, but they also have a realistic idea of what they can expect. Be reasonable with quotes because you don't want to look suspect.
The listing presentation is where you impress clients and win their business. To seal the deal, you must get landlords to sign the property management agreement. However, you have to sell it first. What is unique about it? Where are your negotiation skills?
Once everything settles, and the landlord is ready to work with you, it's time to discuss the conditions of the agreement. What work will be performed and when? How will you manage the property and help the owner draw income?
Remember that you should discuss the rent amount you think you can achieve for this property and highlight your duties during the management process.
The contract is a neat summary of the points you've already discussed, so you're simply checking the boxes in each section. If you've done the groundwork, there should be no issue getting the California landlord to sign.
As the manager in California, you must ensure that the contract is worded properly and includes appropriate information about you, where the property is located, and what you will do to manage the premises.
Generally, these are the pieces of information the California property manager needs:
Other sections include:
The manager is required to have a real estate license to perform most of the property management acts necessary in California. However, this license isn't needed when the manager is actually an employee of a licensed agent, an employee of the resident manager, or a resident manager of any apartment complex or building.
Overall, the activities of the manager exempt from state licensing requirements are limited to the powers under that specific statute. (BPC 10131 and BPC 10131.01).
In California, you're not limited as to what you can put in the property management contract. However, most real estate brokers and managers use a template to help them get started and list the activities.
You can build your own or download them here (PDF or Word)!
Property management is often required in California because the owner doesn't know what to do or doesn't care to perform their duties. In these cases, they authorize a company to do the work for them, and you want to be the manager in charge of that address.
It's crucial to create an agreement that meets your needs and focuses on the duties performed, such as repairs and maintenance.