As consumers, we’re used to seeing ‘no contract’ as a benefit. Many of us even have our own horror stories about service contracts we’ve signed in the past — whether that’s for cell phone service, massage or beauty services, joining a gym, or simply getting water delivered to your office. Believe it or not, there are certainly still situations in which a contract is not only helpful, but necessary. It’s important to think critically about this concept when you’re making purchasing decisions — the first question you need to ask yourself is who is truly benefiting from the lack of contract, the consumer or the vendor?
When it comes to big purchases and big decisions, especially in the case of investments, you should take every precaution to ensure you’re protected. Your home is arguably one of the most important investments you’ll make, and it’s always in your best interest to protect that investment as well as you can. If you decide to work with a property management company and don’t sign a management contract, how can you really know that they’ll live up to your expectations and fulfill their duties and commitments? Before you make that decision, I want to tell you about three key benefits of entering into a contact with your property management company.
There’s a strange phenomenon between some property management companies that operate in Minnesota where they charge rental property owners the first month’s rent when they begin managing a new property as a placement fee. That’s not typical for the industry. Without a contract, especially if you’re paying up-front fees, what’s the company’s incentive to truly take care of your property? If you don’t sign a mutual agreement, you’re unprotected and so is your investment. Just like any big decision you make, especially one that relies on the promise of future services, it’s good business to get it in writing. You can hold your service provider accountable for the promises they make when you have them in writing, which leads me to the second benefit.
Some property management companies run their sales process like politicians run their campaigns — they’ll tell you what you want to hear, but there’s no actual obligation to deliver. When you enter into a contract, the benefits and services promised are guaranteed in writing. That allows the property owner to hold their management company accountable for what they said they’d do. If you don’t sign an agreement, it doesn’t matter what was promised to you. If it’s not in writing, it doesn’t count — plain and simple.
Deciding to rent out your property can be confusing, especially if it’s your first time. There are a lot of considerations that need to be made and some that aren’t immediately apparent. Your management contract should function as a guide through the process — what concerns can arise and how they’ll be dealt with. This will also help you decide what maintenance you want your renters to be in charge of, like mowing the lawn or removing snow, and what you want to take care of yourself or have your management company handle, like blowing out your sprinkler system or changing your furnace filter. When these considerations are put in writing, there’s no room for confusion.
While not being locked into a contract may be a benefit in some situations, it’s irresponsible to not sign one with your property management company. Especially if you’re paying them up front costs for the promise of future services. In many cases, you’re not going to encounter trouble, but is it really worth the risk of being unprotected in the event something goes wrong? Personally, I’d rather be protected.
If you want to hear more about our property management services, give me a call and let’s chat: 952-831-5300!