BY SAMAH HASSAN
Property management has been on the rise in Kenya over the years. It has become a go-to for landlords who have little time and do not want to add managing their properties on their schedule.
Renting out of properties can be a pain in the flesh with tasks like getting tenants to occupy the space, maintenance of the property, collecting and accounting of the rent, services such as security and cleanliness or even beautification of the property.
With this, landlords tend to seek a property manager that would handle everything for them. In return tenants are happy with the property they occupy because now there is a company catering to their every need.
Tenants often complain about a landlord being away or not answering their calls in case of a maintenance issue or even security. That is where property management comes in handy.
Although property management is a growing industry in the country, it is not to say there are no risks especially towards the tenants. This is because it mostly favours the landlord as it ensures the property owner gets his rent on time whether the tenant has money or not. The occupier then is the one to suffer because the longer they delay in paying rent, the more punitive the penalty. Most property management firms charge a 10% penalty on the monthly rent owed from as early as every fifth of the month.
Property management companies make their money from commissions agreed upon with the landlord. For example, a property management company comes with a package for advance rent remittal depending on the landlords needs on different days of the month. They then remit rent on occupied units in advance regardless of whether the tenant has paid for the particular month or not. The tenant then does not get affected if they fail to remit rent on the agreed date, and so there is a penalty, which is to ensure that tenants pay their rent on time and hence a good tenant-landlord relationship.
But this, on the flipside, has the enduring effect of raising the cost of rent that goes to catering for the expense of retaining a property manager. A two-bedroom unit in South B that could ordinarily have gone for about Sh25, 000 for instance, would now cost around Sh32, 000. Efficiency has a price too.
Property management is a good business in the industry of real estate but the question remains; does it work only for the upper class? If you earned a monthly net income of Sh30, 000 and your salary was delayed and you lived in a rental house that is managed by an agency, must your rent go up for that month in terms of penalties? Was that part of the contract in the first place?
But isn’t the other side of the coin as ugly, if not worse? If your landlord manages his property by himself, as is mostly the case in the lower income residences, and there isn’t a property manager who steps in for you by paying your rent in advance when you are hard-pressed and charge you a penalty, the landlord is likely to lock you out by the fifth day of the month. Remember, the developer too has the bank where he is servicing the loan with which he built the premises on his heels.
Which one of the two evils would you rather dine with as a tenant?