By James R. Hagerty and Ruth Simon
The latest trends offer some hope for an eventual recovery in a U.S. housing market that generally has been cooling since mid-2005. Even so, many economists and industry executives say that recovery will be very gradual and won't start before 2008 at the earliest. That's partly because more-stringent lending policies are keeping many potential buyers on the sidelines, while others are holding off in hopes of prices heading even lower. Meanwhile, there is still a glut of homes on the market in much of the country, especially in Florida and parts of Arizona, Nevada and California. (See chart.)
Home sales and prices generally should bottom out around mid-2008, says Mark Zandi, chief economist at Moody's Economy.com, a research firm in West Chester, Pa. "The market will not revive quickly, however," he says. "It won't be until the turn of the decade before housing activity returns to more normal conditions."
Well, things are not looking up. In fact many are thinking it will be better by 2010! Given this dismal news it seems that many will be landlords like it or not. Well, if its time to focus on management then where do we begin.
Lets start with professional property management. As always there is a lot of choice, but how do you get to the short list? Well, here are some tips:
If you have a large portfolio of properties or a large multi-family income property you can attract a variety of companies because many are paid as a percentage of rental income. If you have a single family home or a smaller rental property its just not that attractive to many companies because they won't see much income from it and you may not get the attention you deserve. You may find better service from a smaller property management firm.
Property Managers: How Do You Find Them?
Check with the standard sources such as referrals. You can also ask:
- Local Real Estate Agencies - They may have a local property manager they often recommend to or perhaps one of the agents also manages property.
- Check with your local Property Management Association or apartment association for a list of local firms
- In rural areas the State Apartment Association may be a good resource for a firm near you.
What Do You Look for In a Management Firm?
- Valid Brokers License: In may states a brokers license is required to operate a property management company. You can check to with the local dept of real estate to validate it and see if it has ever been revoked or suspended.
- Management Fees: Property Management fees are generally a percentage of rental income. Fees can vary from company to company and you should shop around. Expect fees of 5% or more as a percentage of rental income. If you own a single family home or a duplex that has a low rental income number, you may get quoted a flat rate. Get more tips