Many people misunderstand the role of a property manager, thinking that the role does not extend beyond the collection and remittance of rental receipts, and acting as a buffer between the landlord and the tenant. Little do they realize that a good property manager will generate greater returns from their property portfolio and enable their long-term portfolio strategy to be realized.
So what should you look for in selecting a professional to manage your property?
Well, first of all, you need a professional who is experienced in the market. Not just in any market though, in this instance, the Dubai market. Typically, if you find somebody with at least 7 years of experience, you will have found somebody who has witnessed and survived the global recession, and that should provide a reasonable indication that they are in the business for the long term, and that they had the skills needed to navigate and survive Dubai’s last property slump. Many didn’t.
A competent property manager will provide a whole host of services for you but the most important is the development of a Property Portfolio Strategy. Your chosen professional must be able to articulate and present his thoughts after conducting a thorough assessment of your personal situation and property portfolio. He must be able to provide you with a credible strategy and activity plan designed to harness the true potential of your property and provide you with the maximum rate of total returns It is essential to have a well-thought out strategy for your property portfolio if you are to maximize your returns.
Not just anybody can formulate a credible and implementable strategy. It requires years of expertise and a fundamental understanding of what makes real estate such a worthwhile and superior investment. A true professional will have a strong knowledge base on topics including industry history, current market factors and trends, risk factors, and the likelihood of relevant future events that will affect the performance of your property investment. This knowledge should span global, regional and local landscapes, and will require a good understanding of economic factors, industry knowledge extending to government policies and regulations, finance and market dynamics.
Forming a strategy is one thing, but being able to bring the strategy to life is quite another. You will require an activity plan which will include details of pricing and marketing, customer relationship management and tenant management and policies for the entire portfolio. Essentially, this area of expertise is related to the “topline” or revenue generation and management of the property.
Equally important is the cost management and maintenance supervision of the property. Many times, I have seen excellent “topline” performance being eroded due to poor operational and maintenance cost controls.
Managing your property portfolio will also require proper performance measurement, communications and review schedules, and status reporting and financial statements. You should always seek examples of these elements as transparency and candid performance appraisals are essential to managing your portfolio correctly by addressing shortfalls to objectives, issues requiring redress, and opportunities for performance improvement, in addition to your peace of mind.
You also need to choose a property manager whom you can work with and who, you believe, has your best interests at heart. Your property manager must be customer-centered and, unfortunately, in this business, this is not always the case.
There is no point entering a business relationship that is lacking in mutual trust and respect. You must have confidence in his ability to manage a business… your business… which just so happens to be a property portfolio. As with all investments, but especially investments in property, there will be good times and challenging times. There is no such scenario as “set and forget”. It doesn’t exist. If you do not respect the manager you have appointed, the relationship will not survive the more challenging times and you will need to go through the whole process of finding a replacement.
So take your time but invest your time to your benefit. Be sure to ask for referrals and call some existing clients. Seek out success stories. Ask to see examples of client reports so you have an idea of their work’s completeness, continuity and timeliness. Ask your property manager carefully thought out questions to enable you to gauge the depth and breadth of knowledge that he possesses.
Ensure that the organization you are dealing with has the resources to support the manager of your portfolio. In these times of eliminating overheads, individual performance can be inhibited because of a lack of organizational support. You should ask to meet the team.
Finally, remember, it’s your investment, and you need to ensure it’s in good hands providing you with the returns you expect with as little hassle as possible. Once you appoint a property manager, your ultimate return on your investment is largely in his hands.