Recently there is a rumour in the market and among property agents that property prices will start to drop further after Feb 2009. Don’t know how much true this has and what is the basis of it.

Since Sep 2008 we noticed that prices of most high-end properties like condominiums in Johor Bahru have dropped quite significantly (10%-20%). This is because those units previously held by developers are now on fire sale. Most developers are now facing liquidity and credit pressures from banks or contractors as everyone in the market is now trying their best to secure cash.

Some developers for the middle-end condominiums have also started to appoint agencies to sell their units below market price. Previously they just relied on their own sale office and staff to sell these units. Suddenly the market is flooded with more supply of properties from both developers and home owners.

Maybe another good news to investor and home buyer – now banks also join the fire sale team. Number of auction properties has increased since early of the year. According to auctioneers: MORE to come in year 2009!!

One side of the market is confirmed – supply has increased.

What about the demand – like rumours in the market, to wait after Feb 2009? According to some real estate agents, they have received more enquiries on rental properties for investment purposes since Sep 2008. However, they are just enquiries only.

Rental Market

On the other hand, rental rate are expected to increase in Johor Bahru. People are holding back large and unnecessary expenses in this uncertain period. More people will prefer to rent first until they feel secured with job markets and their savings.

Banks are now more stringent in approving loan and forcing more home buyers to defer their plan. Imagine, when you apply for loan now banks will start question how long you have been serving your current employer and the business nature of your employer, in order to make sure you have “stable and secured” income, etc, etc….

Expectation on rental hike during this tough period due to the above reasons may be the explanation why there are more investors enquire for rental properties recently.

 

Read more about real estate investment tips at http://reijb.com

We write regularly about real estate investment. Some of our featured articles include:

“How to estimate the value of a property?”

“Why apartment can be the best real estate investment?”

“How important is location to an investment real estate?”

Property management is a business that is regulated and requires a real estate license in many states. This first step requirement means that the potential buyer of an existing business would need to be qualified to run the business. They would also need to meet the same requirements to start one from the ground up.

One way to get experience in the business is go to work for a large management company and learn the ropes. At the same time you could be completing any educational requirements and prepare for taking the license required to professionally manage properties. Starting a company of your own will take some strong detective work to find a property that is looking for management or looking to replace the current management firm. This will entail a great deal of cold calling and phone work to come up with possible clients.

At the same time you could get a web site built so you will have something to point people to when you are speaking with them on the phone. You would also mention the website in all communications or advertisements. All of this would come after you have decided on a company name and have a phone number and address for your business.

Knowledge and preparation are requirements for success. Whether you buy an existing business or start one up, you will need to gain experience and first hand knowledge of the business from some source. The best way to gain real experience is to work in the business for a year or so for a management company. The requirements in your state should be checked also to see what licenses are needed. There could also be educational requirements that you would have to obtain. A smart person would make sure they have all of these ducks out of the way while working for someone else. The real estate department of your state will be able to give you the information you need to know. There also could be an association of property managers in your area. Both of these sources are a place to start to find the information you need.

Finding property management companies that are for sale The Internet will quickly give you and idea of what is for sale and where they are located. Business brokers are another solid place to find listings of businesses that are currently on the market. You can also get questions answered about the way to buy one of these businesses. One important facet of the businesses for sale is the asking prices. This may be eye opening for you. You might also check out local newspapers and the local real estate association. Lawyers that specialize in real estate transactions may also know of management companies that are looking for a partner or are for sale. Once you have an idea of the capital needed to pursue a purchase you can begin to figure if you can make a deal. If you are going to need help with the money you will have to resolve that common problem also. The business brokers will have a good idea if the listed business is cash only or the current owner would consider terms. This type of information will speed up the process of finding a deal that you may be able to pull off.

Another aspect of property management is the properties handled. Are you going to only deal with large apartment complexes or single-family residences? The type of properties you wish to handle could determine the price of a management company.



Money makes the deal



Money talks when buying a business. The seller is usually anxious to sell and if a real money offer is made, they may bite even if it requires terms to complete. The point here is make an offer and see what the seller responds with. You never know what kind of help you may get from a motivated seller. Other ways to make up a short fall is a loan from the bank, a business lender found on the Internet, a partner and family or friends. Some deals take a great deal of creative financing to pull off. If the existing business has long-term contracts with their clients it may be easier to get a loan from a disinterested third party. The most common way to handle the short fall is to get the seller to take back paper to be paid in full by a set date in the future. Maybe they would remain a silent partner for a short length of time. The answer to this problem is how much you can put down and how long you would need to pay off the balance.

The only way you will ever know if a deal is possible is to make an offer and see what the counter offer looks like. The business broker in a deal can help in the negotiations and in many cases make it happen through their deal making skills.

If you come to a point in any deal that the final terms are too difficult for you to live with, then it is time to take a walk. Knowing when to walk a way in also part of good deal making. The wrong terms could make the deal a failure from the beginning. The last thing any buyer wants is to put a large down payment into a business and then watch it fail. The loss of this money could be the end of any possibility to own your own business. The thought process should go like this, this deal is not possible and there will be another chance down the road. Some times in the heat of negotiation the making the sale happen becomes the end in itself. This should never be the reason to make a bad purchase. This is a serious situation that needs to be well thought out.



Conclusions



Once you have the experience, education and licenses, the ownership of a property management company is possible. You can either start one up or buy an existing firm. The expense of buying one will be much higher than starting one from the ground up. Finding one you can buy will take effort and the willingness to commit a sizeable amount of money. The obvious way to start is through a business broker, as they will have a current list of business for sale. They should have a very good idea of what you will need to pay to buy a property management company Coming up with the money may be a problem for some buyers as the price of an existing successful firm will be higher than a startup. An existing management company’s current customers will be a large asset, as they will supply immediate cash flow to the company. So the higher price is offset by the constant cash flow from contracted customers.

If you start a company from scratch, you will need to plan on a significant amount of cold calling, phoning and face-to-face meetings to find customers that need your help. This is a slow start but can be a reasonable way to get into the business

If you are interested in buying a property management company, check out businesses for sale at http://www.acquireo.com/tag/property-management.aspx

When most people decide to buy or sell their property it is usually common practice to utilise the services of an estate agent. But so many do not realise what duties an estate agent is supposed to perform, how they extract their funds or how you, the consumer can get the best service. Here is a brief guide to the work of estate agents and how those selling or buying property can get the best deal.

It is important to realise that not every estate agent will have professional qualifications, these qualifications are however available should the estate agent wish to undertake them. Unlike say, a chartered surveyor, an estate agent does not need to be regulated and officially qualified to operate. Hence it is possible for a person with little or no experience to start business as an estate agent without any semblance of training. It is usually worth pursuing those agents who have some form of professional qualification.

There are a variety of qualifications that are worth looking out for if you are in the process of selling or buying property. An estate agent may have an NVQ level two or three in the ‘Sale of Residential Property’ or a technical award regulated by the National Association of Estate Agents. If your estate agent has neither it does not necessarily mean that they are under-qualified but it is always worth checking their levels of experience and training before signing any contracts.

So what services should your estate agent provide? There are a number of services that should fall under the control of the agent; here is an outlay of these services. After looking at your property it is the agent who should come up with an asking price in consultation with yourself. This price should be gained by comparing your property with similar properties on the market in your area. It should also be competitive as having too high an asking price can lead to buyers being reluctant to put in an offer on your property.

This valuation is not the same as that of a chartered surveyor. An estate agent will arrive at a potential price for the type of property you own in the current market conditions. This valuation will not be accepted by lenders as a cast iron price and will usually demand the valuation of a chartered surveyor in order to release funds for a mortgage.

The estate agent is also responsible for the marketing and publicising of your property. This includes the photography of your home and the literature that accompanies the advert. The usual methods of publicising a property are window sale boards, newspaper articles as well as more contemporarily the internet.

Your estate agent should also manage the viewings of your property. This includes organising the appointments with buyers at suitable times. The times that viewers are available can often be inconvenient, so be prepared to give up the occasional evening to allow potential buyers around your home.

Most importantly it is your agent that brokers the deal. They must manage the offers and consult with you over the accepting price as well as keep the potential buyers well informed. This where it is important to find an estate agent that keeps in contact readily, if you have to constantly chase down an estate agent it is rarely worth employing their services.

By following this advice it should be possible to get a good idea of what an estate agent is supposed to do. If your agent is not fulfilling their duties it may be worth employing the services of another. After all, moving house is a stressful enough experience already, the agency is supposed to take some of this stress away. If they are not, find a new agent who will perform the tasks outlined above.

Choosing a listing agent is the most important aspect in selling your home. Few people realize though that choosing one is a two step process, and it can be confusing, if you’re not prepared in choosing the best realtor for your situation, and knowing what questions to ask once you have decided upon a listing agent.

When starting your search for a listing agent to sell your home there are a few important considerations and questions that you will need to investigate.

First, consider that you need a realtor that realizes that every seller has a unique situation not only financially, but in many other ways too, such as deadlines for selling, or even times for showing your house to buyers.

You will want to find a listing agent that not only you can work with, but also one that has your best interests at heart, and not just their commission. It’s a working relationship, but it’s one in which they are employed by you to sell your home hassle free and for the best price.

Begin your home listing agent search by investigating all of the different realtors in your area. A handy telephone book with agents listing and asking friends and neighbors about any realtors that they may have had experience with are two places to begin.

Remember though that one persons experience doesn’t mean that you will have the same exact negative or positive one. After writing down a list of agents take some time to dig a little further by grabbing a local paper with home listings, and look for particulars.

Note how the agents list their available homes. Check to see if you’re impressed by the quality of not only pictures, but how well the information is presented about the homes.

Be wary of any listing that has grammatical errors, or leaves out vital information such as correct contact numbers. Also, look for the realtor’s websites, and take note of how well their information is displayed, but also see if the site is easy to navigate to find the necessary information about the homes listed.

There can be nothing worse than a listing that is extremely hard to find. Potential buyers will click away if your homes’ listing is buried beneath tons of frustrating non essential information.

Note too the different forms or types of advertising that each realtor has, such as radio, print, magazine, and internet.

The broader informational services your realtor uses the better chances your home will sell according to your schedule and price.

After researching your potential realtors, and deciding on which ones you might like to work with, make an appointment to delve further into their services.

Again, write down pointed questions, and their answers to them. Key questions that most home sellers like to know will have a big affect on their wallets, and if their home sells or not. Make sure answers are effectually given to your satisfaction. Here are 5 important questions that you will need to ask.

What are the listing agent’s commissions, and if your house is sold by another agent what are the fees for both?

What is the agents experience, and how much property have they sold in the last year?

Will your house be placed on an MLS (Multiple Listing Service), or multiple MLS systems?

What is the contractual agreement for the length of time you must list with the realtor to sell your home?

What is the listing agent’s policy for open houses, and will you receive timely feed back to correct problems?

Finally, when making a decision on an agent to represent you and your home remember to be thorough. If there are any questions that you feel during your interview with a listing agent that suddenly occur to you as important don’t be hesitant to ask.

Any confident and qualified agent will be more than happy to openly discuss in a non hurried manner any questions that you might have. Selling your home is an intensely personal one with serious financial matters at stake.

You deserve the detailed and caring attention of a professional. Working with any realtor should be as stress free as possible, and your home should be presented in its best light, so buyers will come knocking at your door.