INVESTMENT PROPERTY
Investment properties are a rare commodity on the Swiss market. Despite rising interest rates, prices for such properties remain stable and in some cases continue to rise. According to the Federal Statistical Office, prices for residential properties rose by 6.3% from the third quarter of 2021 to the third quarter of 2022. Over the last two quarters alone, prices rose by 3.9%.
If you already own a rented property or have just acquired a new property, the following question arises. Do you want to take on the expenses associated with letting yourself, or hand over part of the return to a property management company? Property management can be a rewarding and profitable business. However, it is important to weigh up the pros and cons before entering this field.
Entrusting property management to a professional is beneficial because it ensures that the process is carried out efficiently and effectively. A professional property manager is familiar with the laws and regulations of the industry and is able to handle the complex paperwork and administrative tasks associated with the job. They also have experience in dealing with tenants, landlords and other parties involved in the process.
They can also provide valuable insights into the local property market to help you make the best decisions for your property. Many private owners opt for the property management option. But this incurs costs of between 4-5% of the gross interest. However, when you consider the effort involved in compliant management, this amount is quite fair. This is because tenancy law and the tenants' association do not allow for mistakes and can lead to unpleasant discrepancies. Correct tax accounting is also a very time-consuming endeavour and not to forget the service charge settlement, which can be quite complex. If you're already swallowing hard, this is an indication that you should leave the work associated with your property to a professional company.
EXTERNAL MANAGEMENT
Privately managed administration is the opposite of professional administration. If the above-mentioned issues are feasible for you, you can certainly take on the work yourself. This is because other issues such as maintenance and repairs to the property are manageable in terms of expenditure. However, assuming a rental income of CHF 30,000 and CHF 1,500 in management fees, the question arises as to whether this price does not justify your peace of mind.
PRIVATE MANAGEMENT
Privately managed administration is the opposite of professional administration. If the above-mentioned issues are feasible for you, you can certainly take on the work yourself. This is because other issues such as maintenance and repairs to the property are manageable in terms of expenditure. However, assuming a rental income of CHF 30,000 and CHF 1,500 in management fees, the question arises as to whether this price does not justify your peace of mind.
It is advisable to leave the management to a professional, as this ensures that everything is maintained and managed in the most efficient and secure way. Professionals have the expertise to manage the data securely, create backups, set up access controls and ensure optimal performance. They can also help to optimise the facts and figures for specific requirements and provide support where needed. In addition, handing over administration to a professional can free up in-house staff to focus on other tasks, such as developing new efficient processes.
There are many reasons for this and here are just a few:
1. Increased property valuet:
Professional property management can help to increase the value of your property. Through regular maintenance, inspections and tenant checks, property managers can help to maintain the condition of your property and maximise its value.
2. Lower costs:
Property management companies can often negotiate better rental rates with vendors and contractors, resulting in cost savings for you. Property managers can also identify potential problems before they lead to costly repairs, saving you money in the long run.
3. Increased cash flow:
A professional property manager can ensure that your property is well maintained and that tenants pay their rent on time. This can give you a higher cash flow from the rental income.
4. Lower stress levels:
Dealing with tenants, maintenance issues and the other tasks associated with managing a property can be overwhelming. By hiring a property management company, you can outsource these tasks and have more time for yourself.
5. Less adhesion:
A professional property manager can help reduce your liability by ensuring that all legal requirements, such as safety inspections, are met. In addition, a professional property manager can help protect your property from tenant-related issues such as damage and non-payment of rent.
Property management is a lucrative industry that requires a combination of business acumen and technical knowledge. The industry is constantly changing, and those who can keep up with evolving trends can reap the benefits of this field. However, property management can be a difficult task and there are both pros and cons to consider before entering this business.
With the right strategy and commitment, a property manager can be successful and enjoy the fruits of their hard labour.
