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Owner management vs outsourced property management
Buying property has long been considered a solid investment, but following the market crash in 2008 and the resulting financial crisis that continues to plague the market, owners have had to tighten their belts in the management of these assets.
This doesn’t mean owners need to take on the responsibility of managing their property portfolio singlehandedly. With the right outsourced property management company on their side, companies can ensure profitability and healthy returns for investors.
“Outsourcing of Property management seems take place in three to five years cycles,” says Mark Souris, MD of property management company Periscopic Masingita which manages shopping centres as well as industrial and commercial properties.
“Larger properties, many of which are owned by listed funds, prefer to have outsourced management companies to manage their properties, primarily because of the expertise and professionalism these companies offer,” Souris reveals.
In the last decade, outsourced property management has evolved along with the financial climate to better suit property owners of today. It now effectively serves as a drive-through, allowing owners to choose which outsourced services they need. These include accounting, financial management, paying creditors, leasing and lease renewal negotiations, as well as implementing property management software and systems.
Owners can, therefore, control the strategic aspects of their property portfolio without dealing with the day-to-day administrative functions. It also takes the pressure off owners – they need no longer be familiar with landlord/tenant laws, nor suffer the time and expense of visiting the property, take responsibility for repairs, maintenance and tenant screening or deal with difficult tenants. Nor do they need to learn to use property management software that allows rental payments as well as credit and criminal checks to be done online.
“Property management companies have become very professional, and with the advent of hi-tech electronic communication, they can manage more properties effectively and produce better results than ever before,” he says.
“Furthermore, technology has allowed property managers to analyse and investigate data relative to the property industry which allows for more intelligent decision-making. Some property managers have found niche markets and have become extremely knowledgeable in these market segments.”
Looking ahead, Souris says it will remain vital for property management companies to stay relevant in an uncertain economy. “The challenge remains to be cost effective in managing clients properties without compromising on the quality of management services provided. In striving to achieve these goals, property experience, expertise and knowledge together with an effective electronic management system will remain key in the property management arena.”