On behalf of Kadish & Associates Law Group posted in Commercial Real Estate Transactions on Friday, February 1, 2019.
Investing in commercial real estate can be a profitable venture, but it comes with a lot of responsibilities to the tenants that lease space from you. Trying to meet these responsibilities on your own can be a harrowing undertaking. Many people opt to turn to a property manager to keep things running smoothly. Still, it is up to you to make sure that things are being handled lawfully and properly.
One of the best things that you can do when you are hiring a property manager is to check their experience. You need to ensure that they are familiar with the type of property that they will be running. Once you find one that meets your needs, review the contract to ensure that it outlines the expectations and requirements clearly.
You need to also review the pay structure for the employee. Many property managers are paid based on percentages. For example, they may earn half of the first month’s rent when they sign a new tenant and then 7 to 10 percent of the rent collected each month after. On top of that, there may be charges for maintenance that is done on the property.
If you are concerned about the maintenance, find out who is responsible for completing the jobs. Is the person a general handyman or does the property manager have licensed professionals who come in to complete tasks? What type of maintenance is included – preventative, response or both?
Ultimately, you must make sure that hiring a property manager is in your investment’s best interest and that you have a solid management agreement. Never attempt to work with someone who you don’t feel can carry out the duties that come with commercial real estate.