You've been looking for your perfect investment opportunity in New York City, an opportunity to own a slice of the Big Apple. You've found several condos that fit the bill with upside potential and a steady rental income, and you're excited to proceed with getting a deal done. Then it hits you...How are you going to manage this investment property? What does it actually entail and who is going to help you out? Let's explore what property management for condo investors really looks like.
Getting qualified tenants in place is always going to be a top priority. After all, you're investing for the rent roll. You may be buying a condo that already has tenants in place, which could be a win for you, or you may find yourself with an empty apartment. In the case of an empty condo, you'll want to work with your broker to price and market appropriately to get the unit rented out as soon as possible. You'll have likely discussed the details with your broker while you've been navigating different investment options, so they will already be ready to roll on this task the moment you close on the apartment. Your broker will help ensure that the tenants are financially qualified to rent the apartment from you. Since you're taking on risk here, it's essential that credit and financial checks are performed prior to lease signing.
While finding tenants is the first step, the next will inevitably dealing with your condo's board application process. Again, this is where your broker should be doing all the work to fast-track your clients from lease signing all the way to building approval. Building approval may require that your tenants pay application fees as well adhere and sign off on rental policies that your condo may have in place. Failure to oblige by a condo board's rules can lead to stiffer penalties and simply being on the bad side of the building. As an investor, you probably don't want to be on anybody's bad side as you're not going to be very hands on.
Move-Ins and Move-Outs
When one tenant leaves, another one quickly fills their place. But who takes care of this shuffle? Your broker! They're going to make sure that your former tenants move out on time and that the new tenants are all set up to settle into their new home.
As an investor, there's multiple ways to collect your rent. Here is a list of some of the methods:
Have tenants send a check in the mail every month
Have tenants send a bank transfer every month
Collect totality of post-dated checks at lease signing (i.e. receive 12 checks for a 12 month lease)
Not collecting rent? Tenant stiffing you? Well, then that's a different problem you're going to need to deal with, but we won't get into detail on that right here.
From leaking pipes to some patching work in between tenants, maintenance is a constant when it comes to NYC condos. You want to keep your apartment in tip top shape. That will help it maintain its allure to tenants and future buyers alike. Failure to maintain your condo is ultimately going to result in you dealing with lots of complaints and a long-term downtrend in the rent you're going to be able to collect. When a maintenance request comes in from your tenants, you can simply ask the management company to handle it. The building's management company will either be able to work with the super or within their extended network of specialists to help fix whatever has come up in your apartment. Of course, you should expect that this will all be done at a price, which you should figure out before you agree to the fix.
Not all tenants are the same. Some may be more vocal about complaints than others. Some may threaten rent money. Some may not. Keep dialogue with your tenants. Be understanding of their concerns but also manage expectations accordingly. Don't take complaints personally. This is a business for you.
Staying Totally Hands Off
You may decide that you do not want to be bothered in the slightest with anything related to your investment property other than collecting your rent. You may not want any relationship with your tenants, don't want to deal with maintenance, move-ins and move-outs. That's definitely a choice you can make, but it will be important that you discuss this with your broker. Your broker may be willing to take on full-time property management for you, or they might encourage you to work with the building's management company, who may be willing to manage your property for an annual fee. There are also plenty of 3rd-party property management companies available in the city.
Property management does take time and effort. How much effort you want to put in is going to be personally dependent on how much you're willing to give. Rest assured that you can effectively work with your broker to offload as much of the heavy lifting as you want. It may come with a slight price, but it may be money well spent.