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Property Management

Category : Property Management

Property Management Challenges.

Tarleys Trust 0 comments 22.01.2016

As any property management expert can attest, managing a property is not without its fair share of challenges. This is one of the biggest misconceptions about the property investment industry, and one that many homeowner renting out their property will eventually realise – often only after they have tried to manage the property themselves. While the management of property may seem like a straightforward, easy tasks, in reality it is a demanding, full-time job in itself to effectively manage a property – even if it’s a small apartment or commercial space that has few tenants and minimal upkeep required. Some of the biggest challenges for managing a property in South Africa or abroad include the following common problems:

    • Tenants not paying on time

One of the biggest problems facing landlords is tenants who do not pay their rent on time. Rent collection is by far one of the most tedious and stressful aspects of property management, and with repeat offenders always paying their rent late, it can cause huge problems if property owners are relying on rent income to help towards their bond repayments or other costs. Screening of tenants before any lease is signed will go a long way in preventing issues such as this, but many landlords do not find the time or capacity to do this properly. A good management company has both the manpower and know-how to do proper screening and even credit checks and criminal background checks, ensuring better quality tenants and fewer issues with payment all round.

    • Lack of property upkeep

Another common tenant issue is lack of property upkeep. Maintenance of your property in South Africa is something that has to be done at various points; however when tenants do not take caution in keeping the property well-maintained, routine upkeep becomes constant fixing and maintenance, often at the expense of the property owner. Damage to property can result in tenant fines or even eviction, but many tenants continue to show disregard to the property, which results in warning letters, constant calling out of caretakers and other related stresses.

    • Complaints against tenants

Noisy tenants, late night parties, drunk and disorderly conduct, disputes with neighbours, noisy pets, illegal braais on the balcony and other complaints against tenants is something no property owner wants to face. Knowing how to deal with complaints and how to deal with unruly tenants too is something that property management experts are able to do effectively and efficiently, taking out the stress of homeowners having to deal with disputes on their own without the experience and know-how to manage these issues properly.

    • Evicting problematic tenants

When tenants have reached their maximum warnings and are consistently defaulting on rent, or causing problems for other tenants, it is time to evict. This can be a daunting experience for many property owners, especially if they do not have systems in place and lawyers on hand to assist with the legal ramifications of eviction.

    • Renovation of occupied properties

Older properties often need to undergo renovation to increase the value of the property, and to upgrade the property in general. This could be something simple such as replacing kitchen counters and cupboards with new and improved fittings or a more involved renovation involving days of labour and construction. Renovating property while there is tenants in the building can be tricky, which is why property managers are ideal when it comes to property renovation – being able to facilitate the process effectively.

Property Management Myths Debunked.

Tarleys Trust 0 comments 22.01.2016

In the world of property management, many myths and misconceptions abound. Many individuals and property owners do not fully understand what the term means, and have many assumptions about the effectiveness and necessity of such a service. Some of the most common misconceptions regarding real estate management include the following:

  • Only the very rich need to consider the need to have their property managed.

This is one of the biggest myths, leading many homeowners within the mid-level real estate to assume that their property does not require management. In reality, any property that you are renting out to tenants requires management – from day to day property maintenance work to tenant management, lease agreements, rent collection and property renovation, each of these things is managed by an outsourced, experienced company rather than having to try and do it all yourself as a landlord.

  • Anyone can manage a property, and you don’t need to outsource to get the job done.

Another common myth, many property owners think that they are able to handle everything themselves, only to end up with huge stress and problems when they realise just how much work goes into the management of a property. Tenant management alone can be a demanding job, and without the right experience and skills, it can be extremely difficult to take on something like this on your own – especially if you have a full-time job in addition to managing your own property.

  • Managing a property is simply a case of managing tenants.

While this is indeed a big part of the management process, tenant management is only one aspect – things like problem call outs to deal with broken geysers, blocked sinks, leaking toilets and other small issues are also covered, as are maintenance tasks, renovations, leases and every other aspect that goes into the running of a property in South Africa that is being rented out.

  • Only local properties can be managed, not overseas properties.

One of the biggest trends in recent years is the investment of overseas property. Many South Africans and other nationalities are looking abroad for properties that they can use as holiday homes for some part of the year, and rent out for the rest of the year. Some homeowners have the misguided assumption that they will be able to handle the rental process from another country – one of the most potentially risky mistakes they could ever make. An overseas property manager is essential to ensure that your property is managed properly, regardless of where it is in the world.

  • Property managers are not worth the costs involved.

By far one of the biggest myths is that the management of property will probably be too expensive, and not worth the costs involved. Even small properties can benefit hugely from management services, and studies have shown that well-managed properties are actually more likely to increase in value on a quicker scale than properties that are not managed or ones that are managed poorly. As things like regular upkeep, renovation and other maintenance is done on a routine basis, the property stays in good condition as tenants come and go, making property management a hugely worthwhile investment on many fronts.

Property Management tips for landlords.

Tarleys Trust 0 comments 22.01.2016

As any landlord knows, property management is seldom as it seems at a glance. Many homeowners who plan to let out their property assume that managing tenants and the property itself will be simple and straightforward, without understanding the huge amount of admin and effort that goes into the management of a property – especially in the case of an apartment block. For new landlords hoping to learn how to effectively manage their property in South Africa, here are a few things to consider when letting out your property to prospective tenants:

  • Finding the right tenant

This is the first and often the trickiest step when managing a property. A company that has experience in dealing with tenants is able to determine what sort of tenant to avoid and which tenants will be the least problematic, while an inexperienced landlord may not know how to approach this without added stress. Things like background checks, references, suitability and other factors all play a huge role in property management, to ensure that you find only the best tenants, who do not have a history of rent payment delays, property damage or other factors.

  • Day to day tenant management

Another huge aspect of the landlord job is dealing with tenants on a regular basis. Landlords may be expected to speak to tenants about rent owing, rent increases, problems in the block, noise complaints, any items that need repair and many other issues that may arise on a daily basis. Having to always be on call can be demanding and extremely stressful to many landlords, especially those who have full-time jobs in addition to managing their property. This is where property companies come in – they are able to deal with the petty issues that arise, leaving landlords free to focus on the bigger issues without having to worry about being bothered throughout the week with small complaints.

  • Property Maintenance and upkeep

Yet another aspect of managing a property in South Africa is the property maintenance and repairs that always arise. Landlords often under-estimate the level of work and patience that this requires, from dealing with the tenant and addressing their queries, all the way through to finding a repairman to fix the problem at stake, and getting the best quote too. Then the landlord needs to liaise with the tenant to ensure that they will be at the premises when the repairman is due – resulting in a huge amount of time and admin.

  • Renovations and property improvements

Aside from repairs and ongoing maintenance of your property, you may also want to consider property renovation as a way to increase the value of your property. For most landlords operating independently, this means obtaining permission from your tenant, and working around their schedule as well as your own schedule to determine what renovations are required, and how to go about getting them done. Without experience in this, it can lead to many sleepless nights – making a property manager a hugely important investment.

  • Rent payments and other issues

How do you go about ensuring that rent is paid on time each month? This is another huge factor when it comes to managing a property, and with many tenants lapsing on payments, it can become a huge chore to keep track of who has paid their rent. This is one of the biggest values of a property management company – they are able to keep track of rent and all other aspects, ensuring that landlords can focus on the profits rather than the day to day stress.

Property Renovation can significantly improve the value of your Property

Tarleys Trust 0 comments 22.01.2016

For homeowners wanting to increase the value of their property, property renovation offers one of the most effectiveasd and simple ways to boost property values – something that in today’s tough property market goes a very long way indeed. How does renovation help exactly however, and is it worth the cost of endless building, fixing and remodelling? Here are three of the biggest reasons to consider the benefits of renovating your property:

  1. Renovated properties sell at a much larger profit than those that have not undergone some sort of revamp. Homes with features such as en-suite bathrooms, modernised kitchens, electric garages and beautifully finished floors are far more in demand than those without, especially in the case of apartments and older buildings.
  2. Renovated properties can also be rented at a much higher rate than un-renovated ones, making this an excellent benefit in terms of property management and investment through letting.
  3. Structural changes such as new floors, new rooms or decks, elevators or other value added changes can significantly increase the property value as well as add to the building’s appeal.

While those that can afford the costs are able to consider huge structural and internal changes across the entire property, the average homeowner will target certain areas within the property for renovation. Property experts advise that even acoat of paint in the right colour can make a difference, with a number of other small to significant changes that can be made to boost a property’s value. These include some of the following:

  • New flooring such as laminate wood, tiling, strip wood or other good quality flooring.
  • Walk-in closets in the master bedroom, as well as en-suite bathroom.
  • Renovated bathroom with updated basin, taps, shower, bath and toilet.
  • Renovated kitchen with extended counter space, island, marble or stone counter tops and updated shelving and storage space.
  • Value-added items such as Jet Master fireplace, light dimmers, updated light fixtures in all rooms, electric fencing and under floor heating.
  • Outdoor areas such as entertainment areas, braai areas, wooden decks or sunrooms.
  • Spa bathrooms with Jacuzzi bath, large shower and relaxation area.

Property experts say that trends should be avoided however, as these may not have the same value in a few years as they may do now. With a bit of planning, thought and inspiration, you will be able to put your renovations into place effectively, ensuring that your property in South Africa increases in value, from a financial and practical point of view. Speak to your property management company to learn more about renovating property.

Tarleys Property Management has your best interest at heart

Tarleys Trust 0 comments 22.01.2016

We are at the end stages of our various expansion projects, some of which include, bigger offices, additional staff, a revamped website and new partnerships which have been put in place to ensure our clients maximum growth and optimum service at all times.

It seems 2010 has given the much needed injection of excitement and motivation into the industry evidenced by the increased movement in the market which seems to be growing on a monthly basis as the long awaited Soccer World Cup draws closer and closer to a reality.

As most Property Management agencies begin to increase their prices for 2010, our pricing structure will remain as per usual for the foreseeable future as the pockets of South African citizens will be one of the major casualties of the Soccer World Cup. We are doing everything possible to protect the investments of our clients, both short and long term.

Our primary objective is to maintain the wealth of South Africans by not jumping on the 2010 bandwagon of increased prices motivated by the attraction to the abundance of foreign currency which will be flowing through our country this June.

The publication of articles written by both myself and other staff members form the beginning of the new (and hopefully improved) interface of the company, through which we hope you will learn more about us and the team behind our property division.

3 Huge Benefits of Outsourcing Property Management Services

Tarleys Trust 0 comments 22.01.2016

Whether you own a small apartment or large premises, property management will be able to save you a fortune in expenses as well as stress. Despite the fact that many property owners think that they can handle all aspects of managing a property without the help of experts, it is all too often much more difficult than it appears, and to ensure effective management of resources, property owners need to be careful about hiring inept fly by night companies who are not equipped to manage properties. A recent news story about South African Police Commissioner Bheki Cele and his mismanaged team of property managers has brought home the importance of ethical and accountable management – regardless of the size or nature of the property. The SAPS has come under a lot of fire for allegations of mismanaged funds, which are reportedly in the region of nearly R7 million.

While the SAPS answer to the powers that be on the use of the allocated funds, property owners can consider the following benefits of hiring a trusted company to manage their property effectively:

•Residential properties are able to extend their life-span considerably

Residential apartments, especially those that date back to the 1970’s and thereabouts, are able to stay maintained and well-kept with proper property maintenance and management. From simple things such as replacement of floors, taps or windows, to full renovation and restoration of older flats, properties are able to get a new lease on life, making them solid investments that will attract tenants year after year. With so many new apartments on the market, older apartments are often bypassed for trendier properties – however with regular renovation and upkeep, older blocks are able to continue keeping up on the highly competitive property rentals market.

•Disputes and other admin tasks are handled effectively

Property owners no longer have to deal with ongoing disputes about rent increases, leases and deposits, as management companies are able to deal with all admin and related issues on the owner’s behalf, from concerns about property development to any other issues that may arise. Many landlords have full-time jobs in addition to managing their property, and face endless problems dealing with tenants at all hours of the day – something which eventually leads to service levels dropping as issues build up. A good indication of a reputable management company is the way that they handle disputes and the effectiveness of their operations. With the right management company, not only will property owners cut down on the amount of concerns that they need to deal with, but future disputes will be minimised with proper management solutions and services that are provided by the outsourced company.

•Property experts will be able to save you on costs

Many landlords avoid hiring property management companies as they are concerned about forking out to pay for management services. In the long run however, these companies can actually help save costs – with excellent contacts on repair services, and admin kept up to date, things run a lot more smoothly, minimising on wasted time and keeping costs down by carefully managing funds. Many management companies are also able to negotiate discounts with bulk wholesalers, to help you save even more on contracting costs and supplies for renovations.

For fuss-free operations and quality service, property management companies offer a highly beneficial way for property owners to manage their properties easily and simply.

Don’t skimp on the minor repairs & Property Maintenance

Tarleys Trust 0 comments 22.01.2016

Property values can be maintained or even increased by effecting minor repairs or improvements during the period in which it is rented or occupied.

Investment property values can be dramatically increased while, as a corollary, property values can be significantly reduced by owners neglecting to do necessary repairs or even worthy improvements at the right time. While the property is tenanted, this time should best be utilized to sustain the property, rather than skimping on repairs and settling for a slightly lower return.

Maximizing your return on investment is crucial at the beginning stages of owning your property, especially property bought as a rental investment. Assessing this aspect and instructing a proper contractor to undertake the property renovation work can be something of a daunting task and owners should be guided by the expertise of their Agents.

Timing can also be crucial as, no tenant wants to be caught up in the midst of too many repairs happening at any one time. Instead, this should be done over time with the assistance of the Agents in order to ensure the harmonious living of your tenants.

Ensuring repairs are carried out at the right time could also save money in the long run as it will ensure preventative action is taken to maintain items such as woodwork, roofing structures, built-in-cupboards, etc.

Work needed to the property, whether planned or not should be budgeted for each financial year based on property age, size, history and materials found within the property, etc. This budget should help ensure that the maximum return on investment is achieved both during its use as a rental property as well as a capital investment which should be generating income for years to come.

Property management in SA after the SWC 2010

Tarleys Trust 0 comments 22.01.2016

Trying to be a player in the South African Property market is much the same as being a player on a soccer team participating in the World Cup – and if you have recently tried playing soccer you will know it is no easy task and should be reserved for those with special talents. The same can be said for trying to be a property management player in the South African market – rather leave it for those with the necessary know-how.

A few years ago many property owners in South Africa were filled with dreams of dollars and euros being thrown around at them for manipulating their properties according to the likes and tastes of all the tourists that will be flooding our streets during the World Cup (which lasts for exactly 31 days).

As with all things FIFA many contracts and regulations had to be put in place to assure some kind of control – this is where Classic Hospitality signed a deal with the infamous MATCH (FIFA’s booking agent) to assure that property companies could milk this World Cup cow for every single cent she is worth. Profit prophets were promising wealth beyond relative measure – even up to $8 000 a day (which is approximately R61 000 a day) could be made by allowing Dirk and Jan from the Netherlands to use your private property as a World Cup residence. Phew.

But what now? We’ve all heard the news of seriously declining numbers of tourists eventually reaching our shores. The figures went from an expected 500 000 tourists down to 400 000, down to 350 000. A mere 60% of hotels have received bookings (one week before the World Cup kicks off). This is not the same picture as say two years ago when loads of South Africans were renovating properties and investing in new residential properties that can be turned into a gold mine by slapping on a B&B sign in the garden and some clean sheets on the bed.

It seems that many of us were wickedly deceived by promises of enrichment through the World Cup. But here’s the catch: managing and developing property is a long term investment – a marathon. You can not react on a media buzz to invest thousands of rands in a project that has a 31 day lifespan.

So, if you are one of those home owners who spent a fortune just to loose it, may you learn the most vital lesson: property management is for property managers.

Body Corporate Insurance Explained

Tarleys Trust 0 comments 22.01.2016

We know that unforeseen events can cause a large amount of stress on you as a property owner. Luckily, insurances are in place to help alleviate the stresses caused by these situations. In this information pack, we will look specifically at Sectional Title property insurances.

Generally speaking, there are 2 types of insurances a homeowner in a Sectional Title complex will have. The first is the insurance you, as an owner, have in respect of your particular flat. The second is the insurance the Body Corporate has in respect of the building.

The individual units insurance is usually based on the requirements of the institution which has an endorsement over the property, usually the bondholder (if applicable) and is taken out either through the bond issuer or an independent insurance company or broker.

The Body Corporate’s insurance is based on the replacement value of the entire building less the cost of the land. In other words, the total it would cost to rebuild the complex should it be destroyed. Certain other items are covered in this type of insurance as well.

Understanding these types of insurances and their application is fundamental to being a property owner and will allow educated decisions and the correct action being taken in a given set of circumstances.
Before delving into the different applications of the different types of insurances, there are a few general rules that apply to both types of insurances:

Insurance will never pay for the cause of the damage only the resultant damage;
  • Insurers and underwriters often have specific contractors that must quote on insurance related repairs;
  • Insurance will not cover any damage caused as a result of a failure to maintain any item;
  • Insurance will not pay for replacing any item which can be saved or repaired;
  • Insurers will not accept an incomplete claim form;
  • The cause of the damage must be repaired and proof thereof is often required;
  • Neither of the above mentioned insurances cover the contents of any property, this will only be covered in a policy specific to your contents
When the Body Corporates insurance is appropriate in a set of circumstances, the Owner will always be responsible for the excess. There are no exceptions to this rule.

In order to determine which of the two types of insurances are applicable in a set of circumstances, one need first assess the situation. If the cause of the problem is completely inside your unit, your individual property insurance will cover the resultant damage. If, however, the cause of the problem is related to an external source (which usually includes your geyser), the Body Corporate’s insurance may cover the damage.

When any event occurs which is subject to an insurance claim, the first action one would need to take is to limit the damage as far as possible. For example, if a pipe bursts, the Owner must take all necessary and appropriate steps to stop the flow of water. Thereafter, the resultant damage can be assessed.

Insurers will only appoint an assessor when they feel it is necessary and therefore none of the damaged items should be discarded before this determination has been made.

In order to ascertain the appropriate insurance, we illustrate through a simple diagram below. In this diagram, we depict a 1 bedroom flat with a main en-suite and a guest bathroom.

insurance_diagram_copy

Key:
Double Lines  ( = ) : External brick walls
Single Line ( - ) : Internal brick walls
If the problem were to occur on an external wall ( = ) the issue would usually be covered by the Body Corporates insurance.
If the problem were to occur anywhere within the section but not on the double lines ( = ), this would not be covered by the Body Corporate’s insurance.
If the problem were to occur within or on the single lines ( - ), the problem would also not be covered by the Body Corporates insurance.
To expand matters further, should the problem be coming from the slab above or below the Section or the roof above the Section, this is also for the Body Corporates insurance (provided it is not due to any neglect of maintenance).
If a plumbing problem is being experienced which falls under the Body Corporate’s insurance, the resultant damage should be covered by the Body Corporates insurance.  This, however, is a very tricky area, as often the cause of the problem defines what is or isn’t covered.  Each claim needs to be assessed individually to determine this.  Your first steps would be to get the water flow stopped, the problem isolated and repaired and the floor area dried.  Once again, we need to use the insurance recommended contractors to attend to these problems and all reports and invoices need to be handed in to our offices to submit with the claim.  All other resultant damage will be assessed once you have completed the above steps.
If there has been a break-in or attempted break-in, the matter needs to be reported to the police and a copy of the claim number needs to be handed in to our offices to submit with the claim form.  Again, all reports and invoices need to be handed to us as well.
When an insurance claim is completed, we will need to complete a claim form.  An example of a claim form is below:

Claim Form CSure.xls

Once all information pertaining to the claim has been completed, this will be forwarded to the insurance brokers who will then either appoint an assessor, or pay the claim on the strength of the supporting documentation.
Should the problem fall within the definition of the Body Corporate’s insurance but the claim not be paid for any reason, this does not automatically confer liability upon the Body Corporate.
Important Steps to Follow:
1)       Take all necessary steps to reduce damages
2)       Assess which insurance the problem falls under
3)       Inform the appropriate insurance company in order for them to log the date of the event
4)       Attend to the cause of the damage
5)       Obtain quotes for repair of the resultant damage (do not discard any damaged goods)
6)       Submit all quotations and all necessary information to complete the claim form to us in order for a claim form to be completed and submitted

A few important functions of managing agents

Tarleys Trust 0 comments 22.01.2016

Managing Agents are appointed for Bodies Corporate to fulfill certain operational, administrative and legal duties or requirements.

Managing Agents are also expected to stay up to date with changes in legislation, both in Sectional Title as well as other areas of law.

The administration of levy accounts is one of the most important and often overlooked areas of administration. No Body Corporate can function efficiently without a healthy bank balance and it is with the guidance of the Managing Agents that foreseeable expenses are planned for well in advance.

The insurances of the property is also an extremely important aspect of the functions of a Managing Agent. No building or property should ever be under insured, over insured, uninsurable or void of certain policies. It is in this area that the guidance of an experienced Managing Agent can make all the difference.

A Body Corporate, by its very nature and design, must be properly maintained or repaired. Any inaction in this area could expose a Body Corporate to the legal elements, particularly in cases where a failure to do so could result in a potential void, either wholly or partially to the insurance policy.

When improvements or repair work is undertaken, a levy payer wants his or her value for money. The ability to assess quotations and oversee work is of fundamental importance.

The proper control of banking accounts should not be underestimated. The Managing Agents should have the ability to properly reconcile accounts, pay expenses on time and invest surplus funds at preferential rates.

The Managing Agents duties often extend far beyond the scope of their contract. Many aspects of property knowledge, law, building and municipal regulations are encountered on a daily basis.

When choosing a Managing Agent, choose one that’s right for you.