Property management is an important consideration when it comes to making sure that your property maintains its upkeep. Hiring a managing agent in Singapore can do a lot to help you not just with making a profit for your real estate, but also with making sure that your property increases in value over time.
Benefits of Property Management
Like all good things, prime real estate needs prime maintenance in order for it to make a profit. One way to maintain it as an investment real estate is by being a hands-on landlord yourself. However, if you don’t want to do that, this is where having a property manager comes in.
When it comes to buying real estate, a broker can also act as a managing agent or condo manager with property management included in their roster of services. These services include, but aren’t always limited to, the following:
1. Screening potential tenants – Managing agents all have a system of screening potential clients. These help to minimize accusations of discrimination, as well as filter out the best tenants that can not only pay for longer, but also pay on time and are less likely to cause any problems with your property.
A managing agent can also make sure that the property is marketed to as wide a tenant base as possible, which is something that you may find hard to do alone.
2. Rent collection – Aside form screening for tenants, managing agents can also set the initial rent level (which depends mostly on how much certain units of the property need to be priced in order to recover the investment and continue making a profit), they can also collect and adjust the rent in your absence.
Essentially, if you don’t want to manage the property yourself, hiring a property manager can free you up with having to look after the monthly upkeep.
3. Maintenance and repair services – Whether they are personally in charge of estate maintenance or hiring a third-party estate maintenance service, managing agents are more than capable of managing building maintenance in Singapore and making sure your property is in peak condition. Because of this, they often have large networks of reliable people who can do the job.
4. Budget management – A managing agent (or condo manager, depending on the type of property you want to invest in) also helps in detailing budget plans as well as establishing and keeping existing records, such as income, expenses, complaints, maintenance and repair costs, etc.
How Managing Agents Market Your Property
Properties that slowly become undesirable will at some point experience a dip in rent, which will leave you with a less attractive return on your investment real estate over time.
In order to make sure that you can still experience a profitable return on your investment, having a managing agent or condo manager for your investment real estate is essential – aside from their function in making sure the property appeals to potential tenants, they also have to market the property to said tenants.
Managing real estate in Singapore involves understanding the operating expenses and the level of budgeting required in order to keep these expenses manageable. The appropriate rental rates are estimated based on the existing costs needed to maintain the property and the increased percentage of return, among others.
How Managing Agents Price Rent for Your Property
Investment real estate works on a different way than most real estate properties, as they are used mostly as a source of income rather than a primary residence. There are also a lot of factors that your managing agent or condo manager needs to keep in mind when calculating the cost of rent for your properties and marketing it to potential tenants.
Depending on how lucrative the property is as a living space (i.e. the property’s condition, proximity to amenities, transport hubs, markets, etc.), the price can be made high or low.
Examining the “Buy-Low-Sell-High” Strategy
The phrase “buy low, sell high” has become a mantra seemingly ingrained in every real estate investment seminar, and has since been incorporated into every book and infomercial on the subject. However, this isn’t always as easy as it sounds – in fact, the principle is incredibly difficult to execute.
While your property may increase in market appreciation and accrue considerable market equity on paper over time, it’s important to prepare for when you reach an income cap, and the earnings start to decrease from then on. If your investment is located in an area with high appreciation rates, this can have a negative effect on your return rates.
There are existing exit strategies that you can use in order to avoid seeing your investment turn into a costly white elephant, such as reinvesting in new property or selling the existing property outright, though this may take some strategic planning with your managing agent in order to pull this off.
On Competitive Pricing
As a property owner, you may also need to embrace the possibility of competitive pricing. Your managing agent needs to do this in order to make the rent strike the balance between yours and the tenants’ interests is also something that a managing agent or condo manager needs to be able to do.
While the price of rent may seem disheartening to you at first, the profits that they will generate will eventually accumulate over time. Keep in mind that the results are not immediate – pouring your investment in real estate may not guarantee fast results, but the results are definitely guaranteed.