Choosing a Great Property Manager
You’ve bought an apartment in Berlin, Germany! Congratulations.
You may have educated yourself on how to buy a property in Berlin and now you’re ready to perhaps rent it out.
You can count yourself among the lucky few who has successfully reserved and closed on a purchase in the ultra-competitive Berlin housing market (Berliner wohnungsmarkt).
Your notary and attorney are taking the final steps to ensure that all documents are properly registered as you patiently await the actual handover of keys. The next step? Find a Berlin property manager (Berlin Immobilienverwalter).
How To Find A Berlin Property Manager
Property managers and letting agents may not be too difficult to find. There are literally hundreds of parties willing to help you with your Berlin property. You can find many online. From individual broker/managers to large professional firms with staff in the hundreds, the choices run the gamut.
But as you find Berlin property managers in the Google search listings, you should recognize that every property manager and property management firm is different in service and results. You might think that the best property manager is a little like a good restaurant waiter. You barely notice them, yet you appreciate how responsive they are and that everything is in capable hands.
A lower quality property manager will be more like the waiter you constantly have to flag down to refill your water glasses, take your order, or remind about a forgotten dish. And they may drop your order or get it wrong.
The key to finding a good Berlin Property Manager, is asking these questions.
5 Questions you should ask Every Property Manager:
1. Who are your Clients and Why are They your Clients? – This might be the most important question you ask a potential manager. It will reveal their priorities and loyalties.
These 2 questions will quickly tell you if you are the type of client the manager truly likes to work with. For example, If the company works mostly with medium or large owners who own tens or even hundreds of units, you will quickly realize where you stand in relation to their best clients.
Don’t be surprised if bigger, more important landlords and property investment clients get matters addressed more quickly or with more attention. And don’t forget to ask a company why they are in this business. You want to make sure their motivation is a good fit for you and your property.
If the answer is that they already own their own large portfolio and it was easy to offer third party management as an additional revenue source, their own units may be their first priority. Do they have vacant units? Don’t be surprised if one of their own units is leased much more quickly than yours. Your first question should ask what kind of clients they serve and why they are good at serving them.
2. What Types of Real Estate do you Manage? – Obviously you want a manager who has experience and most likely a specialization in properties similar to your own. Don’t trust a friend’s referral if the referral manages mostly houses in the suburbs and you own a flat in the city. Each requires different resources and skills.
Everything from the lease terms, tenancy rules, legal regulations and the physical considerations are different. You want a manager who manages exactly the type of real estate that you own, and in the same market (preferably sub-market) as yours. Make sure your property is a good match for the prospective manager’s portfolio.
3. What Exactly am I Paying You to Do? – This sounds quite silly, but you would be surprised how many clients make the mistake of not completely understanding what they are paying for. For example, in Berlin there are companies that do only leasing, or only management, and in some cases both. And even within, say, just leasing, some leasing agencies only connect landlords with renters…no showings, no key handovers, no tenant screening…all while charging you a percentage of your rent.
Don’t just assume that an agent will do all these things on your behalf, it pays to ask. On the topic of costs, some rental property management agencies in Berlin charge a percentage of rent. Others charge a set monthly fee.
There really is no standard rate or structure, so comparisons can be difficult to make. The most important thing is to simply ask questions (and lots of them)…are there extra charges for certain services, what if I need to evict a tenant is that included or do I need to also pay an attorney.
How is your management or leasing fee charged and when is it charged? Does your service include homeowner association meetings or other tasks that I might need to address as an owner? This is not to suggest that you should choose the manager who does absolutely everything or who is the least costly when you compare proposals.
What is more important is that you have a clear idea of what you are paying for and what services are, or are not, included. Some services you might not need or want to pay for, while others will leave you discouraged if they are not included and you find out the hard way.
Understanding what a property management company in Berlin will do for you and what the costs are is part of the due diligence that comes with real estate ownership. Ask as many questions as you need to in order to see if a prospective manager is the right fit for you.
4. Who will Actually be Managing my Flat? Real estate ownership is more than just managing a building and its components. It is at its heart a people business. Tenants, neighbors, building contractors, service contractors, and landlords are all stakeholders in the smooth operation of a building.
And your property manager is often the difference between a well-run property and a poorly run property. Especially when things get tough and problems occur, nothing replaces a manager who is good with people and also has your interests at heart. If you’re interviewing a larger firm, see if you can find out who will manage the flat and try to meet them. You might not be able to, and you might not get a complete sense of their professionalism, but at least you will have a personal familiarity with the manager and some foundation for building trust and rapport.
Remember that this is the person who is dealing with your tenants and representing you in your absence. Imagine that you are a prospective tenant and how you would feel if this person is your contact for issues or questions involving the flat. Try to find out and meet who will be managing your flat and you can quickly build a level of comfort (or not) about choosing this property management company over others.
5. Do You Trust the Property Manager? – This is not so much a question, but a final assessment that only you can answer as the owner. Do I trust that this property management company and this manager/leasing agent will act in my interests and in a professional and legal way. In a former job I worked for a major US bank as an asset manager, managing REO (real estate owned). This was right after the housing crash and many of these bank-owned properties were apartment buildings.
I can tell you from experience that mismanagement, and in some cases even outright fraud on the part of the property manager, led to severe property declines. Trust is not something you can see in a company brochure, website, or even a long meeting. You should, after all your other questions have been answered, ask yourself whether you actually do trust this manager.
Preparing for Top Property Management Performance
With the closing behind you the responsibilities as a new rental property owner (and landlord) are just beginning. Soon you will delegate a substantial part of that responsibility to a rental manager who will act on our behalf to make sure the property performs.
Questions about how they work and their management infrastructure and experience are starting points and important basic questions to ask. But the more subjective questions listed above will be key to completing the whole picture for you.
You should check out the property management technology they use as well. While most property management firms are behind the times with respect to apps and cloud based property management solutions, you need these tools to manage well today.
From online rent payments to tenant portals to client based accounting, these solutions take the pressure off of property managers, letting them report to you more effectively.
Hiring a Berlin based property management company that is well organized and technologically efficient is a given. Finding one who will fit your needs in the best way possible based on the diligence above will ensure success and help you sleep soundly at night.
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