A property manager is a third-party hired to handle the daily operations and financial management of all types of real estate and is essential in maximizing the return on your investment while keeping the property in pristine condition.
According to Martin Lipsman, President of House Hunters Panama, a fully integrated real estate organization specializing in luxury sales, rentals, and property management, over 50% of the buyers they assist in Panama are foreign investors.
The majority have purchased a property with the intent to rent it out, so property management gone from being just a service to a necessity.
Without living in the country themselves, owners require a qualified property management company that is able to treat their investment as though it is their own. The peace of mind an owner receives having professionals manage their properties offers the following benefits:
1. Reduce your stress
The goal of a property manager is to handle the difficult parts of owning and renting a property so you do not have to.
Qualification and placement of tenants, maintenance issues, rent collection, and cleaning services are just some of the services a professional property manager handles.
In 2016, deals and coupons company Groupon, conducted a survey of 2,000 individuals through the market research firm OnePoll published in Forbes, asking respondents a series of questions on how hard they work, whether they are stressed, how high their stress levels are, what stresses them out, and what they do to relax.
The research showed that 60% of Americans have an unhealthy work-life balance.
Now imagine besides having daily responsibilities with work or business, having to get through all the hassle related to owning an investment property (payments, taxes, contracts, handyman work).
A property manager functions as a single point of contact to streamline all of the responsibilities behind an investment property.
This makes owning real estate in foreign countries a much less scary proposition and opens a world of opportunities for one to consider.
2. Compliance with Panamanian Laws
Having the right property manager can add significant value to your investment and keep you in compliance with local real estate and tax laws.
Local laws such as by Law 93 of October 4, 1973, which regulates renting apartment and rental income in Panama can provide significant fines to the owner if not handled correctly.
Though a property manager does charge a fee for their service, helping the owner navigate a foreign market will minimize unnecessary costs to the owner to offset the manager’s fee.
3. Maximize profits and cash flow
One of the Property managers job is to help the owner set an aggressive pricing strategy based on market prices to get the property rented and adjusting the rental price if costs or maintenance fees increase.
With their finger on the pulse of the local real estate market, the property manager is able to price the property correctly at the right time in order to attract qualified renters quickly and retain them for a longer term.
In addition, the manager establishes an optimal cash flow strategy by setting a date to collect rent each month and strictly enforce late fees.
A property manager is also responsible for marketing the property when renters finish their contracts and move.
They know where to advertise and what to include in their ads.
The key is to advertise the property 30 days prior to the completion of the current lease in order to minimize the gaps in occupancy and maximize return on investment.
4. Manage tenants
One of the main responsibilities of the property manager is to manage the tenant’s day-to-day needs.
They are involved in all capacities, from finding the tenants and dealing with complaints, to initiating evictions due to non-payment or non-compliance of house rules.
A qualified property manager is to treat the real estate as though it is their own regarding maintenance of the structural and internal utility systems.
The goal is to minimize wear and tear on the apartment through monthly inspections and maintenance on plumbing and electrical systems so the tenants return the property in as close to similar condition as when was delivered to them.
A property manager will have its own network of certified plumbers, electricians, carpenters and general contractors, so you don’t have to call anyone.
This network eliminates the amount of time a landlord must spend making repairs, chasing tenants for late payments, and enforcing the terms of a lease.
The property manager is your most important business partner
Real estate property management involves the understanding of operating expenses, budgets, and complex accounting systems to provide the owners with a monthly and yearly financial statement breaking down income and expenses.
Also, every property manager should have a marketing companies support to implement effective advertising strategies to locate qualified tenants as quickly as possible.
Having a good property management company on your side goes a long way in ensuring easy, profitable and stress-free investing. It can bring you hassle-free rentals and strict maintenance on the property, while optimizing your cash flow and return on investment.