Risk management is not just a necessity in real estate, it is in fact one of the most critical aspects of this field. To succeed in this industry one must play their part in ensuring that any possible risk is well covered to avert the last minute rush to save what is already lost in case anything goes wrong anywhere.
Administration and risk management is a critical component of real estate property management. The record-keeping function must be carefully managed and, the greater the level of detail, the better the likely results. The fact that they’re smaller doesn’t make those transactions less important and it doesn’t reduce the risk involved in doing them. As a property manager, you’re contracting with an owner to market and rent their property, collect the rents and remit them to the owner, and to manage the property, from maintenance to tenant rules enforcement.
In doing this, you’re transacting with owners, tenants, repair companies, advertising media, contractors and others. Each and every one of these transactions introduces some risk into your business. It’s not necessarily a lot of risk in each case, but it is cumulative.
Real estate industry is all about property. With this comes the necessity of one’s responsibility to take care of the property in their field of operation. With the diversity of assets and structures within the premises, going beyond just normal care to manage and maintain the property more responsibly really counts. If you are a real estate practitioner you have to commit to shouldering the responsibility of everything around that is within your course of duty.
Property management is also physical management of the structures and outdoor areas. Landscaping, electrical, plumbing, roof, walls, appliances, and much more are all part of the physical property. The property manager must maintain relationships with contractors and repair companies, budget capital expenditures, and monitor the quality of all repairs and maintenance. This function ties in with the financial piece, as some improvements will require significant capital expenditures and budgeting for them. It ties in with tenant and occupancy management because it is important to tenant retention to have well-maintained properties.
Understanding the needs of the tenants is important for this function. Getting them to move in is only the beginning. The property manager must then respond to their requests, monitor their activities as regards the lease requirements, collect rent in a timely manner, and continually assess the tenants’ satisfaction as regards the property’s amenities versus those of competing rental properties in the area. The unwelcome task of eviction for violations or non-payment is part of this function also. More on the tenant management function.
The real estate practice may be an enticing venture but not an all bed of roses. It is advisable to be on the alert as fraudsters loom the industry in such of any possible loophole to prey on anything that comes their way. Scams in this industry are executed in different ways from illegal flipping, mortgage elimination, land fraud, equity skimming, equity fraud and a lot more. Real estate practitioners need to be on the watch out for these manipulations on their clients rather than burry their heads in the sand and presume that all is well out there.
Real estate practitioners must be vigilant of red flags that may signal that they are in the midst of a legal matter that involves real estate fraud. In most cases, attorneys are tipped off by fact patterns that clients or potential clients provide that don’t add up or are completely unsupported by the documentation they present. In some cases, clients may be the victims of the real estate scam, but sometimes they may be consciously participating in the tangled web of a real estate fraud that they themselves have initiated.
Unscrupulous individuals can do inconceivable things with personal –and public–information ranging from the relatively minor infraction to the abhorrently mind-boggling scam. Attorneys for real estate clients may have to put on their Sherlock Holmes hat when they find that their client’s explanations of events or circumstances do not seem to hold water.
Real estate scams can lead to individuals having their houses stolen from underneath their feet, bankruptcy, damaged credit reports and credit ratings—not to mention the incredible attorney fees that will amass as you try to help them escape from the tangled web of a real estate scam. Worse yet, your clients may find themselves stuck between a rock and a hard place since the scam may cloud their title. This could prevent them from being able to sell their house or take out another mortgage or equity in the current house to use as collateral for a new home.