For many international buyers, at least in my business focus, one of the biggest worries of Philippine property investors who reside outside of the Philippines is the inability to be present in all the dealings related to their properties. However, this daunting task of being physically present monitoring property tenancy and maintenance is being fulfilled by the property management services being availed by unit owners with service fees.
As the title above suggests, Purchase. Enroll. Collect. are the easy processes to making money in residential real estate but first and foremost, you must own your unit. As you are the legitimate owner, you may enroll your unit to property management. As soon as it is rented, you may receive rental income at a specified rental amount set by your property managers.
Roger bought his unit 9 years ago and remembers, “As soon as the property was turned over to me, I had my unit enrolled where they charged one month out of a 12-month rental. It was relatively easy. They oversaw screening tenants, paying utility bills, common charges, etc. I was ecstatic to find out how much was deposited to my bank account minus the fees and other related expenses.”
The main difference between a property manager and a landlord is that the property manager does not typically own the property(s) they are managing. There has been a well-established property management services industry in the country particularly in Cebu and Metro Manila, with significant players starting in the 80s, encompassing commercial, residential, parking, shopping complexes and several more. Suffice it to say that with the advent of technology, everything would be as seamless as possible from digital contracts to money remittance. Despite the distance, your unit can be well taken care of. Obviously, our focus is only on the residential aspect as availed by clients. There is also a directory of Property Managers available within your locality from a group of brokerage firms including subsidiary companies of your property developers.
” . . . There has been a well-established property management services industry in the country particularly in Cebu and Metro Manila, with significant players starting in the 80s, encompassing commercial, residential, parking, shopping complexes and several more.”
Property Management includes taking care of the property, from cleaning to leasing. The ease of this work is mastered by companies that offer such services. While most brokerage firms can do property management, it takes experience to be great at it. There are much bigger companies wholly set up to handle massive property management.
The purpose of Property Management includes maintenance and repairs, collection of rents, accounting to the landlord for all monies collected and disbursed, interviewing and securing tenants, tripping of the property, evicting tenants, scheduling of contractors such as landscapers, painters, installers, pest control companies, paying taxes and utilities, making mortgage payments on the property, the setting of rent rates, income tax accounting, keeping operations running smoothly, dealing with tenant complaints and tenant satisfaction, collecting monthly dues, a list of other services.
For Roger, “The property management was a big factor with my investment because I rarely visit the Philippines; I could not rely on my relatives to visit them on a regular basis. Though I initially had a Special Power of Attorney with the property purchase, the property manager, represented me in all transactions related to my unit upon their management.” If not with the developer’s property managers, the owner may also assign this service to their brokers whom they bought their property originally from or to just any brokerage firms of their choice.
“In property management contracts, the owner gives the company the authority to execute lease contracts with tenants, on his behalf. So it will be the authorized officer who will sign the lease contracts.
In property management contracts, the owner gives the company the authority to execute lease contracts with tenants, on his behalf. So it will be the authorized officer who will sign the lease contracts. After the lease contract is notarized, a copy is sent to the owner to keep.
A sample contract states “In consideration of this representation and the fees to be paid, AGENT agrees to act as management AGENT with respect to this property, to use due diligence in the management of said premises upon the terms herein provided, and agrees to furnish the services of his organization for the renting, leasing, operating and managing of said premises subject to and in accordance with the terms and provisions set forth between parties.”
Property management usually charges 1 month of a 12-month period however, some expenses are subject to negotiation with the tenant. There are recurring expenses such as incidental and maintenance expenses These will appear in the statement of accounts sent to the owner every month. The net amount is what gets deposited to the bank account of the unit.
A few testimonials of clients on property management read:
“As much as I am a very hands-on person, I just cannot oversee how plumbing and cleaning are done with my unit. I leave it to property management. I never get to do those things which makes me worry-free. – Mr. Santos”
“I receive remittance from my rental income on a regular basis. Since my unit is rentable, the size of a spacious 1 bedroom, I make about Php 90-100k a month” -Leo
“When it comes to numbers, I Just look at the summary Statement of Accounts for every month and I see how the numbers are.” -Dr. Bert
“I am surprised to receive incremental rental remittances every so often.” -Angela
“As much as I am a very hands-on person, I just cannot oversee how plumbing and cleaning are done with my unit. I leave it to property management. I never get to do those things which makes me worry-free. – Mr. Santos
In our busy world, delegating some tasks for a fee of your property needs are especially important to your convenience and peace of mind. Investments in real property can really be profitable and manageable, leading to consistent cash flow, maximizing income. If owning one is easy for as long as you have the affordability, turning them to your favor as it rents out should as well be easy as Purchase. Enroll and Collect.
(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation, and commercial properties. He has worked as an International Property Specialist to markets in Asia, Europe, and North America with Ayala Land, Federal Land, and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus to Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com. Email at firstname.lastname@example.org.)