Management and real estate companies were mentioned in my article on the proper use of rental application fees. You may have gotten the idea that I prefer one over the other. Not the case, I go with the company that has what my customer is looking for. But what about you? Management or Real Estate company which is the best for you? How do you decide?
Management Or Real Estate Company
In order to make an educated decision, you need to know how each works. Let’s take management companies first.
These companies like real estate companies are licensed by the State of New York. Training and continuing education are required of both. Both entities have contracts with the building owner. So far they are even. This is where the evenness ends.
The Difference
Management companies go one step further in their contracts. Management companies have limited power of attorney. The power of attorney gives them the ability to make decisions about repairs to the property without consulting the owner.
More important to you is the fact that management companies know the building. They know what works, what needs work and how to get it done. Think of them as a pseudo landlord. Like the landlord, management companies collect the rent. They can also bring eviction proceedings if necessary.
Commercial Residential Buildings
Management companies manage commercial residential rental property. These are apartment buildings with 5 or more apartments. Non-commercial residential buildings–1 to 4 families–are not worth their time and effort.
Searches
The management company performs its own credit report and background search. Some charge a fee some do not. These may be covered by the agreement the company has with the owner.
Apartments
The management company never has to search for an apartment. They have apartments. Why search for what you already have? The management company knows in advance when a vacancy is coming. Management companies offer yearly apartment rentals. Some will consider room rentals.
Now let’s look at apartments that real estate companies represent.
The Real Estate Difference
As mentioned earlier real estate and management companies have some important similarities. The differences are just as important.
Real estate companies tend to represent 1-4 family homes. They can represent apartments in commercial residential buildings. These are buildings that do not have a management company. They can also get you an apartment in a managed building provided the management company is agreeable. There are other differences worth mentioning.
The list
- The real estate company does not get a limited power of attorney from the owner.
- The broker cannot make decisions about the running of the building.
- It does not collect rents for the owner.
- Evictions are the owner’s responsibility.
- The contract with the brokerage ends when the rental begins.
So why use a real estate company?
- The real estate company looks for the rental property over a large area.
- Real estate companies have listings for a variety of properties.
- Your agent can work with you to locate the apartment. (See Agency Disclosure)
- You can hire the agent to be your renter’s agent. (See Agency Disclosure)
- The rental property is most likely a 1-4 family home.
Types of rentals
Real estate companies represent properties with different rental possibilities. Of these are house and apartment rentals. Seasonal rentals, yearly, month to month, and room rentals.
Break It Down
Managed Buildings
A deciding factor in your choice is where you want to live. If your preference is an apartment building you can use both. But the management company may have the edge. Owners tend to hire management companies. This way they don’t have to deal with the day to day of running the building.
Need a doorman, gym or pool? Managed buildings are your answer.
Real Estate
When it comes to more types of rentals you gotta go with the real estate company. Students looking for a month to month or short term rental–6 months– should approach a real estate company. Are you a snowbird? Then a seasonal rental is for you. Room rental? Real estate companies have you covered.
Just the beginning
There you have it Management or Real Estate. I covered as much as I could without being tedious. I suggest that you look deeper into whichever one of these appeals to you. Due diligence, there’s that word again. Do it, shift the odds in your favor. Read more of my articles on apartment rentals.
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
Comments, Questions, Suggestions?
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