The usual way that a property management company comes upon the scene is when the owner of a building makes a contact. Often the owner has just acquired the property through a purchase or exchange, then looks for a manager.

If you are about to acquire an income property, consider contacting the management company in advance. The ability to estimate income and expenses and a keen knowledge of the market makes the manager a valuable asset during the preacquisition process. The property manager has the background necessary to provide significant assistance in determining both the location, desirability and economic feasibility of a property.

Inspection And Evaluation

When evaluating a property, the property manager should perform a comprehensive inspection of the physical property, thoroughly review current leases and past maintenance records, and, when appropriate, talk with the on-site staff, and current tenants and neighbors.

Preliminary market analyses and pro formas should be completed during the preacquisition stage to determine the property’s operating costs and to project possible investment return. These analyses will help establish whether the property will perform according to the owner’s investment objectives, or whether the property is too risky for acquisition.

The Rent Structure

When the property is acquired, the management staff will know in advance what can be done with the rent structure. The goal will be to increase the rents to market levels and/or the legal maximum. Tenants with leases can not be given rent increases if their leases prohibit them, but the rent for vacant space or for property with expiring leases may be increased.