When it comes to owning a rental property, one important factor to consider is how it will be managed. A well-drafted management agreement can help ensure that your property is cared for properly and that you receive the maximum returns on your investment. In this article, we will explore what a management agreement for rental property is, what it should include, and why it is essential for landlords.
What is a Management Agreement for Rental Property?
A management agreement for rental property is a legal document between the property owner (the landlord) and a professional property management company or an individual property manager. The agreement lays out the terms and conditions for the management of the rental property, and it outlines the responsibilities of both parties.
What Should be Included in a Management Agreement for Rental Property?
A well-drafted management agreement for rental property should include the following:
1. Description of the Property: The management agreement should include a detailed description of the rental property, including its location, size, and any specific characteristics that make it unique.
2. Services to be Provided: The agreement should specify the exact services that the property management company or individual will provide. These services may include marketing the rental property, screening tenants, handling lease agreements, collecting rent, and managing repairs and maintenance.
3. Fees and Charges: The management agreement should also clearly outline the fees and charges that the landlord will be responsible for paying. These fees may include management fees, leasing fees, and maintenance and repair costs.
4. Rental Rates and Vacancies: The agreement should specify the rental rates for the property and outline how vacancies will be managed. This may include how the property will be marketed, tenant screening procedures, and how long the property will remain vacant.
5. Termination Clause: Finally, the management agreement should include a termination clause that outlines the circumstances under which either party may terminate the agreement. This clause should also specify how much notice must be given and what happens to any pre-paid fees or security deposits.
Why is a Management Agreement for Rental Property Essential?
A management agreement for rental property is essential for several reasons:
1. Legal Protection: A well-drafted management agreement can provide legal protection for both the landlord and the property management company or individual.
2. Clear Communication: The agreement helps ensure that both parties are on the same page regarding the management of the property.
3. Professional Management: A professional property management company or individual can help ensure that the property is cared for properly and that the landlord receives maximum returns on their investment.
4. Reduced Stress: A properly managed rental property can reduce the stress and worry that often comes with being a landlord.
Conclusion
If you are a landlord, a well-drafted management agreement for rental property is essential to help ensure that your property is managed professionally and that your investment is protected. It should include a detailed description of the property, services to be provided, fees and charges, rental rates and vacancies, and a termination clause. By having a management agreement in place, you can reduce your stress and worry and enjoy the benefits of your investment property.