If you are investing in real estate, there are many cases where you leave the management of the property to the management company.Even if it is a real estate management company in a bite, its ability varies.If you sign a contract with a company that does not respond well, not only will it cause a mental and physical burden, but the management company itself may be at risk because it will not be possible to recruit tenants.Remember that real estate investment is management, and I would like you to select a management company from the investor's own perspective.This time, let's know about risk management when choosing a management company.
table of contents
- 1 What is a real estate management company?
- 2 Three major points to identify a stable rental management company
- 3 Carefully check the business content and management content, and check the high ability to attract customers
- 4 The management company entrusted with great pains is a risk … Careful selection of real estate agents
- 5 Can a property management company go bankrupt?
- 6 What to do if the rental management company goes bankrupt
- 7 Summary
What is a real estate management company?
What exactly is a real estate management company?Its job is to reduce the burden of real estate management work for investors by intervening between investors and tenants and preserving and managing the living environment.In other words, it can be said that it is a service that acts as a proxy for property management work that investors themselves must perform.This includes a wide range of services, including rent collection, contract renewal, maintenance management such as inspection of cleaning equipment, complaints from tenants, handling when moving out, and recruiting new tenants.
Three major points to identify a stable rental management company
If you fail to choose a real estate agent, it will be reflected in the decline in the occupancy rate.Therefore, the more you can sign a contract with a good contractor, the more likely you will be successful in real estate investment.And a stable rental management company has three elements.
1. How many units do you manage?
As a guide, use 10,000 units as a standard, and avoid companies that have a high occupancy rate but a small number of units under management.If you focus only on the occupancy rate, there are many cases where the occupancy rate is high because the number of managed units is small.The fact that there are many managed units is also evidence that the ability of the contractor is widely recognized.
2. Do you have a track record?
There are some companies that have been established for a few years and are still strong, but there aren't many of them because they were founded by experienced veterans.If a company has been in business for more than 10 years as a guide to confirming its track record, there is a high possibility that it is a company that has experienced all sorts of troubles and has acquired the ability to manage risk.In addition, confident companies present their occupancy rates on their websites.Furthermore, it is important which standard is used to calculate the occupancy rate.Peak-only data is not informative.Calculation standards differ depending on the supplier, so if you want to know more, it is best to contact them directly and ask them to show you the data.
3. Are you registered with the rental housing management business registration system?
It was enforced in 23 by the instruction of the Ministry of Land, Infrastructure, Transport and Tourism in order to optimize the management work of rental housing.
By establishing certain rules regarding rental housing management operations, the interests of tenants and landlords can be protected, and by announcing the registered business operator, it can be used as a basis for deciding on management companies and properties.It is a good idea to use a symbol mark with a motif of a house or condominium as a landmark.
Carefully check the business content and management content, and check the high ability to attract customers
It is a high level of business content, confirmation of management content, and ability to attract customers.There are companies that only serve tenants, and there are companies that handle everything from day-to-day management to recruitment.
If you focus on one, you have the advantage of being able to consistently request it, but if you apply it to multiple, each business system may be different and it may be difficult to cooperate.If you choose to borrow in bulk, you will be requesting a long span of several decades, so be sure to check the details of the management.
In recent years, Internet recruiting has become the mainstream for attracting customers, so it is safe to look at the company's website for yourself and see how easy it is to use and how to show the recruiting.Some people go directly to the store, so there is also a method of asking a few times to see how it goes.Community-based real estate agents often have a thorough knowledge of condominiums and apartments in the area, so one way to use such agents is if the property targets locals.
Also, based on the data below, from the point of view of tenants who choose a real estate company, it can be said that the completeness of property information is extremely important.Therefore, it can be said that a management company that has a large number of managed properties is more advantageous for attracting customers.
- Do you post many photos on internet real estate search sites?
- Do you have a large number of properties listed?
- A company with a good reputation in the local area
- Is the store easily accessible?
- The shortcomings of the property are also written
- looks great in photos
- We are a nationwide company
Related article:How much is the management fee in real estate investment?
The management company entrusted with great pains is a risk … Careful selection of real estate agents
The situation of tenants is not the only risk in real estate investment.In many cases, companies that do not respond well to investors do not have the ability to do so, and they may not be able to attract tenants even if they are recruited, so it is necessary to be careful when choosing a company.
The main reasons are that there are no proposals for improvements even if there are vacancies, there are no proposals other than lowering the rent, and the restoration work is incomplete.
If the response of the selected contractor is bad, the occupancy rate will be affected, and the rental income may be cut off.Management and solicitation are important factors in real estate investment, and in many cases, we outsource the work to a real estate management company.In that case, it depends on the owner which company to ask and which work to entrust.There are various tasks involved in running an apartment, but to what extent the owner manages and to what extent it is outsourced to contractors, such as tenant mediation, rent collection, contract renewal and move-out procedures, troubleshooting, building maintenance work, etc. You have to decide whether to
Related article:When you want to change the management company that entrusts real estate investment, the flow of change procedures and points to note
Can a property management company go bankrupt?
Many people who invest in real estate often ask a management company, but even if it is a management company, there are various business contents, and there are things you want to be careful about when entrusting rent collection.That's what to do if the rental company goes bankrupt.In the worst case, there is a risk that the rent cannot be collected, so if you entrust a part of the management to a contractor, you need to consider bankruptcy in advance.
In general, it is said that rent management companies are less likely to go bankrupt because the income from management fees is stable.As long as there is an owner who asks for management, a fixed income will be generated every month, and it will not be affected by the economy.In addition, since there is no need for large-scale investment costs, there are fewer cases of cash flow problems.However, it cannot be said that it is absolutely impossible, and there was a case where I called the owner because I was suspicious that the rent was not being transferred, and I had no choice but to go bankrupt due to financial difficulties.
Also, if it is only management work, there is no need to touch the rent entrusted by the owner, but it is a common pattern that the sales do not progress as expected and the funds do not flow well when you start working on real estate development.Since the parent company was a real estate sales company, the influence extended to the rental management company, and there were cases where the subsidiaries were involved and went bankrupt.
However, in most cases, many of the reasons for bankruptcy are not due to problems in the main business.
What to do if the rental management company goes bankrupt
In order to quickly judge the signs of bankruptcy, let's check if the payment of rent is delayed.It is impossible that there is no transfer on the fixed day every month.You also need to be careful if you are involved in a business other than your main business.If the expenses other than rental management are not covered, the rent will be used to repay the loan from the bank.If you run your business well, you should never be late on payments.
If you see signs of bankruptcy, act now.The first thing to do is cancel the management contract.We will send you a content-certified mail to that effect.If you only communicate orally, you will be told anything later, so prepare documents that can be left as official proof.Then, based on the resident information, we will contact the resident and change the transfer destination of the rent.If you want to ask a new rent management company, tell them that information, and if you haven't decided yet, you should transfer it to the owner's account.However, if you usually leave the management to a contractor, the tenants will not know who the owner is, and you will have to prove it.If you also prepare the rental agreement and the certified copy of the register, the transfer procedure will be smooth.
There are several points to choose a management company that is difficult to go bankrupt.The conditions are high capital, long management, large scale of business and large number of employees.Make sure you choose a company that has a proven track record in rental management.You can compare the number of properties you have managed so far, the number of owners who are currently doing business with you, and what kind of properties you manage.Confident companies present specific numbers, so there is a way to refer to that aspect.
No matter how big the company is or whether it is a management company with a track record, it goes bankrupt when it goes bankrupt.Let's ask a trustworthy contractor after checking whether we have dabbled in a new business.Bankruptcy risk is not zero even if you carefully investigate, so please prepare a countermeasure in advance and proceed with real estate investment.If there is no rental income for investors, there will be no immediate income.If you don't get any income, you may be late to pay your loan or pay taxes, so be sure to prepare for perfect measures when choosing a management company.
Summary
- The key points to determine a stable rental management company are the number of units under management, track record, and whether the company is registered in the rental housing management business registration system.
- In order to further identify the management company, check the business content, management content, and the ability to attract customers
- Rent arrears are a danger sign of bankruptcy
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
