In this article we examine the need for Property Management in Romania for non residents & residents alike. In addition, we identify the best & worst practices of landlords between landlord tenant & landlord & property manager.
Why Use a Professional Property Manager?
Apartament de vanzare Baneasa
Professional property management can make owning & earing from rental properties a hassle-free income source.
For some people, the decision to use professional property management is a simple cost/benefit equation. For others, they chose to rely either on themselves, or if absent, on local freinds or helpers. Invariable, the latter solution either fails at some critical point, or the landlord is not getting the most out of their property. I have seen examples of a landlord charging only 100e per month on an apartment worth 250e in rent only to make it easy for the tenant to be able to pay on time each month & for the landlords friend to have an easy live. The loss of 1,800e per year is almost 6 times what it would cost to get excellent professional help,
Apartament de vanzare Baneasa
Not only are professional property managers experts at handling properties and tenants, they generally take only a small percentage of your property’s monthly rent in exchange for their services. We for example typically charge around 6 weeks rent per year. When you consider what you get in return—a expert resource, hassle-free, landlord-hands-off, passive income stream—the decision to employ a professional property management is a quick & simple one for the smart landlord. Before I started White Mountain Property, I myself was not a smart landlord, it must be said!
While the right property manager can benefit any rental landlord/ property owner, you might especially want to consider hiring a property manager if any of the following conditions exist:
You live further than a couple of short drive away from your rental property
You’re not a home maintenance wizz
You don’t have at least 6 hours per month to deal with tasks related to your rental property
You recognose you will be either too lenient, disorganised, occupied to be an effective landlord & collector of rent each month
You don’t want to make yourself constantly available in case of emergency
You don’t have a good working knowledge of landlord-tenant law
You don’t ever want to have to worry about dealing with difficult or non-paying tenants
You need your spare time for other matters, including focusing on the strategic matters of owning property, such as when to sell, upgrade, renovate etc.
What to expect from a Professional Property Manager?
Below you will find the best & worst practices of managing rental property in Romania, or anywhere for that matter.
I’d like to give you an insight to why I think having a reliable property management company manage your romanian property can be far cheaper than managing it yourself & in addition, much less stressful. I base this on managing a large personal protfolio myself also a larger one for my clients exceeding 3m Euro.
I’m someone that finds it very hard to let go & to depend on others, especially if there is a chance something could go wrong that is somehow important to me. Because of this trait, I left my career as a designer of some of the worlds most truly exotic cars, Aston Martin to come to Romania to manage my own protfolio. In doing so, I have built a business tailored around my needs & the needs of 34 other clients to date, rising by around 5 to 7 per year, every year. Previously though, I tried to balance my career with being a landlord & its not an easy thing to get away with.
I have clients from England, Scotland, Northern & Southern Ireland, New Zealand, Sri Lanka, the Philippines, Belgium, USA & even a few from Yorkshire! Their backgrounds could not be more varied, from English teachers to money brokcers, to IT gurus, personal coaches, accountants, hydro engineers to transport planners. Some are in property investment for the fun, & others are serious investors. Some don’t wish to spend any money regardless of justification, some spend too freely & others, the wise few, don’t wish to spend money unless it is strategic but if it is, are willing to do so.
I have previously been too generous in equiping soe of my property & that is investment money I will never see agian, but since it is mortgage money, I will pay 3 times over for it!. I have also tried to manage my own property in the capacity of owner (which is viewed by the tenant very differently than to being a Property Managament agent as it creates a good-cop, bad-cop scenario to your advantage)
Looking back, I recognise that my most successful clients all have similar traits. I will share this observation with you. They have been very focused on what they need from their investment & responsive to those able to help deliver that.
I share this as a sort of wisdom, becuase not all cleints follow this advice & there is a direct correlation between poor performing investments & poor owner management.
Many people foolishly try to manage their own places themselves with almost no input, but with a half hearted management style. I say, either do it yourself & do it properly, bang on time with professional sharpness, or hand it to someone to manage it for you. If your tenant recognises you are disinterested, unwilling, cheap-minded or conversely over generous, a push-over, slack on deadlines etc, the relationship is at the very least, likely to be a weak one, leading to disloyalty, lack of asset respect, lack of committment to you & at worst, a mean, adversarial relationship bringing stess to your life. Good propery management usually costs around 6 weeks of rent per year, but you will loose much more than 6 weeks per year if you handle it badly.
I myself have tried to manage as an owner (not as a Property Manager) & lost 6 months from 12 available months, 2 years in a row with 2 disasterous, tenants in the UK. I now use a local Property Manager there who, if I am generous, are barely worthy of the title & certainly have very few of the best practices discussed here, but I still save more than my outlay as the rent comes in regularly. If I had relied on freinds etc, again, the tenants could take advantage of this, knowing the freind only has a limited amount of resolve to collect the rent on time each month.
Having a propefessional, independant (ie, not a freind) intermediary provides a significant psychologocal advantage. The Property Manager can act as good cop, bad cop & buffer unresonable requests of you whilst being able to amicable apply continuous pressure to get the rent in on time every month.
The Property Manager-tenant relationship is less breakable than the landlord-tenant relationship. If the latter is broken due to broken promises, there is always a tension between them, for the future. Not so between Property Manager & tenant. Each time the rent is paid up to date, the relationship is reset to being on good terms again.
This is the most significant reasons why I beleive Property Management is hands-down better than landlord-self management: for hassle, stress & financial benefits & it is why I myself also hire a Propery Management company for my own property out of my immediate reach. When I have done it myself, as a landlord, I’ve sufferefed missing rent & a lot of stress chasing it.
I will share what I know to be the best practices
Best Practioners Do:
Verify who your PM is by talking to existing clients yourself, not just through reading testimonials
Check fees for each kind of service on offer & ask for the history of those prices. If it is a new company, prices may rise for some years as they find their feet
Make a list of every single type of help & service you are likely to need & see if the PM can deliver them, or recommenda solution for them. See proof of ability though as overconfidence in this industry is rife & often unfounded
Ask for a detialed plan of what the Plan of typical evens for the year
Ask to understand for the tools used in PM, ie, what software, what communication is used in the business to rais repeat reminders etc
Ask what strategy exists for collecting rent, even if late, missing, insufficient
Ask for a full understanding of costs for standard work & for non standard work
Ask what connections the business has with service providers such as plumbers, electricians etc
Ask what network of other agents the PM works with, to ensure an apartment is rented out quickly. You don’t want a poor quality PM to hold your keys from would be tenants found by better agents.
Respond quickly to any request from the PM for rectification or repairs. Seek to understand proof of the diagnosis & proof of the repair where necessary
Adopt a pragmatic approach to bad tenants. They need to be dealt with rapidly, but amicably. Cut out the rot & start agian. Fighting in court is expensive & pointless.
Seek to have a firm but fair relationship with your tenant, just as you do with your bank. You are lending them a valuable assett in return for a fair return.
Seek to acheive fair rents, not peak rents. Owners who seek maximum rents, as most Romanian owners seem to, suffer indefinate void periods & rapid tenant turnover. It must be a win win situation.
Communicate regularly with your PM at least until they know your trends, tastes, standards & tolerance.
Keep on top of repairs & requests for repairs. Lazyness here will lead to disatisfied tenants. Remember, renting a property is a business & your tenant is entitled to what they pay you to deliver. Either you or your Property Manager must act in a timely manner here.
Always, be fully aware of what kind of commitment you are making in a PM agreements both when your property is vacant & tenanted, as the responsibilities are not the same in both cases
Understand your liabilities & your property manager liablities
Bad Practioners Do
The opposite of the above points!
Provide the lowest acceptable standard of conditions & equipment, leading to a resentful owner-tenant relationship where one distrusts the other
Ignore or avoid tenant requests for help or intervention
Fail to take proper inventories which leads to arguments & disputes a the end of the tenancy
Keep little or no communication with their Romanian property manager
For more information or advice on Property Management, please feel free to contact me directly & I will be happy to help. www.whitemountain.ro
Damian Galvin, Founder, White Mountain Property Management