How do you evaluate a property before managing it?

1 Inspect the physical condition

The first step is to inspect the physical condition of the property, both inside and outside. You want to check for any damages, defects, or maintenance issues that might affect the safety, functionality, or appearance of the property. You also want to note the age, quality, and style of the fixtures, appliances, and amenities, as well as the layout, design, and space of the rooms. A thorough inspection will help you determine the current and future repair and improvement needs of the property, as well as its appeal to potential tenants.

2 Assess the market value and potential

The second step is to assess the market value and potential of the property, based on its location, features, and condition. You want to compare the property with similar properties in the area, and analyze the supply and demand, the rental rates, and the vacancy rates. You also want to consider the trends, opportunities, and challenges of the local market, such as the economic, demographic, and environmental factors. A comprehensive assessment will help you establish a realistic and competitive pricing strategy for the property, as well as its income and growth potential.

3 Review the legal and financial documents

The third step is to review the legal and financial documents of the property, such as the title, deed, mortgage, insurance, taxes, utilities, and leases. You want to verify the ownership, liens, encumbrances, and restrictions of the property, as well as the compliance with local, state, and federal laws and regulations. You also want to examine the income and expenses, the cash flow and profitability, and the budget and projections of the property. A careful review will help you identify any legal or financial risks or liabilities that might affect the management of the property, as well as its performance and profitability.

4 Identify the strengths and weaknesses

The fourth step is to identify the strengths and weaknesses of the property, based on your inspection, assessment, and review. You want to highlight the positive and negative aspects of the property, such as its location, condition, features, value, potential, legal status, and financial situation. You also want to evaluate the property's competitive advantages and disadvantages, as well as its opportunities and threats. A clear identification will help you develop a SWOT analysis for the property, which will help you formulate a strategic plan for managing it effectively and efficiently.

5 Communicate with the owner and tenants

The fifth step is to communicate with the owner and tenants of the property, to establish a rapport and a mutual understanding. You want to discuss your findings, recommendations, and expectations with the owner, and address any questions, concerns, or requests they might have. You also want to introduce yourself to the tenants, and inform them of your role, responsibilities, and contact information. You also want to solicit their feedback, suggestions, and complaints, and assure them of your commitment to providing quality service. A respectful and professional communication will help you build trust and loyalty with the owner and tenants, and foster a positive and cooperative relationship.

6 Prepare a management agreement and proposal

The final step is to prepare a management agreement and proposal for the owner, to formalize your contract and scope of work. You want to outline the terms and conditions of your service, such as the duration, fees, responsibilities, and expectations. You also want to present your plan and goals for managing the property, such as the marketing, leasing, maintenance, accounting, and reporting. A detailed and persuasive agreement and proposal will help you convince the owner of your value and expertise, and secure their approval and satisfaction.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?