Illusion no. 22: Property management is actually child’s play!

Read this fact sheet to find out just how complex the issue really is.

Managing a property professionally is no child’s play and requires a great deal of specialist knowledge, experience and the necessary skills. If you consider the legal texts alone, which are important in connection with a property, this already shows how complex, varied and challenging property management is. Among other things, a property manager needs knowledge of

OR, ZGB, SCHKG, VMWG, tax law and, depending on the complexity, knowledge of VAT (opting for properties).

In addition, there are financial guidelines, regulations and current court rulings that make the whole thing even more complex. It’s easy to lose track here and mistakes can have serious financial consequences. In the following, we would like to explain the various real estate management services in more detail and highlight the benefits for the customer.

The three main areas of real estate management

1. technical management

Maintenance and repairs
Checking tradesmen and their quotes takes time, experience and a basic knowledge of structural aspects. A large network is an advantage so that offers can be checked and submissions with bidding rounds can be carried out. Management companies often work with selected craftsmen with whom they have had good experiences over the years. Our top priority is not the price, but a good price/performance ratio and quality.  

Inspections and condition checks
Properties are subject to an ageing process and require periodic inspections and maintenance. Carrying out inspections and drawing up condition reports using checklists gives owners the necessary transparency about the condition of their property and helps to identify damage or investment needs at an early stage.

Hiring and supervising a janitor
The administration takes care of hiring a janitor and draws up a janitor contract that clearly regulates the duties. The janitor is regularly monitored, including with regard to his or her work in the property, and supervised by a specialist from the management department. The selection of a good janitor is a key prerequisite for the image of the property and satisfied tenants. At the same time, safety-relevant points, e.g. snow clearance, fire regulations, insurance, etc., are regularly checked and improved where necessary.

2. administrative management

Letting services
The aim of letting is to present the property to as wide a public as possible. Today, it is becoming increasingly difficult to find good tenants. Advertisements are usually placed via online media (marketplaces and your own website). Print media are still an alternative, but have become less important in recent years. The importance of a clean and correct advertisement is often underestimated.

Selecting and screening prospective tenants
Special attention must be paid to the selection and screening of prospective tenants. Selecting the right tenants can not only save money but also time. Once a tenant is in the property, it takes a great deal of time and money to terminate the tenancy in the event of a dispute. And the wrong choice of tenant can lead to problems in the property if the tenant structure does not match.

Review of market rents
In a property management company, rents are reviewed on an ongoing basis and adjusted to the current situation within the scope of what is legally possible. In the event of terminations, the rents are checked for their market value and adjusted, which can lead to higher income. Rents that are too high are lowered to reduce the risk of vacancy. Today, there are useful tools for tracking market rents. Lively rental activity in the market area helps to determine the correct market rents.

Drawing up rental agreements
A rental agreement governs the relationship between tenant and owner and sets out the obligations and rights of both parties. There is probably the greatest risk of making a serious mistake when drawing up a tenancy agreement. An incorrectly drafted tenancy agreement can have major legal and financial consequences for an owner, which can also have an impact over a long period of time. In addition, the correct drafting of the tenancy agreement is essential for passing on heating and ancillary costs to tenants.

Compliance with legal regulations and deadlines
In the case of rent increases, terminations or other unilateral contract amendments, there are legal regulations that must be complied with. Terminating a rental agreement without an official form can render the termination null and void. In addition, there are statutory deadlines which are essential for the desired timing and activation of the changes. Another important factor is the correct calculation of rent changes in the correct period, e.g. in the case of reference interest rate or index changes. If mistakes are made in these areas, a lot of time and money can be lost.

Maintaining contact with tenants and owners
Impeccable tenant care and dealing with individual tenant needs can be very time-consuming. This requires a sure instinct and the necessary administrative expertise. It is an advantage to be able to draw on a wealth of experience in the real estate sector. Trained administrators are used to dealing with angry, demanding or difficult tenants. Ideally, they have many years of experience and have proven themselves in critical situations. This gives both the owner and the tenant a good feeling that problems will be solved professionally and fairly.

3. accounting management

Accounting / debt collection
Accounting and debt collection are supported by suitable IT programs. A solid debt collection system not only improves the tenants’ payment behavior, but also enables early recognition if a tenant stops paying. This means that legal deadlines can be met. The accounting department should only be managed by trained specialists (qualified accountants) who are familiar with the current standards, guidelines and legal regulations.

Debt collection / debt enforcement
The management regularly checks tenants who are in default and, where necessary, takes legal measures up to and including termination or debt enforcement. If debt enforcement proceedings are necessary, the administration will initiate and implement them and liaise with the authorities and debt enforcement offices.

Preparation of the heating and ancillary cost statement
A legally correct tenancy agreement is essential for the preparation of a heating and ancillary cost statement. The exact recording and billing of the various ancillary costs during the year form the basis of a complete statement. Only in conjunction with a correctly drawn up tenancy agreement can the tenant be charged for all heating and ancillary costs that can be passed on.

Quarterly / annual financial statements
The accounting department records all accounts receivable and accounts payable during the year. A financial statement (balance sheet and income statement) is prepared for all properties every semester (quarterly if desired) and at the end of the year. These documents serve as the basis for the tax return. Their accuracy is therefore of considerable financial and legal importance.

Professional management by Ginesta Immobilien Verwaltungen AG – Your advantages

If you are not an expert in the following areas, it pays to seek external support.

Tenancy law / Code of Obligations

• Your property will be professionally managed by specialists who are familiar with the relevant legal bases and tenancy law in particular.
• The selection of tenants is coordinated with the existing tenant structure wherever possible.
• We try to comply with the legal requirements in such a way that no expensive disputes arise.
• We carry out professional inspections with managers who have a federal certificate.

Optimization of the net yield

• We let vacant rental properties at market conditions.
• We work with the latest tools from Wüst & Partner and know the small-scale market rents inside out.
• Thanks to the many first-time lettings and letting mandates, we have an ideal overview of the rents paid.
• We guarantee a fair outsourcing of heating and ancillary costs and the correct passing on of these costs to the tenants.
• On request, we determine the net return and show how the return on equity can be optimized.

Marketing / Letting

• Thanks to its customer database and network, Ginesta Immobilien can establish many contacts without external, expensive marketing services.
• We continuously maintain a computerized customer database with hundreds of search profiles.
• We can contact a large number of prospective tenants directly and at no great cost through customer referrals from other rental properties, direct contact with prospective tenants, cooperation with relocation companies and periodic customer newsletters.
• We work with a very professional brokerage tool and can record all activities for the rental process.
• We publish properties on our homepage in German and English and have a lot of experience with international tenants.
• Very exclusive objects are published on international marketplaces.
• We produce professional letting brochures tailored to the property.
• We carry out personal viewings with trained specialists. We do not send janitors to viewings or have existing tenants do them. This allows us to get to know potential tenants ourselves.
• We work with property managers with a federal certificate who have an explicit service mentality and a good command of English. A good command of English is a mandatory requirement for the management of exclusive properties, as 80% of tenants are foreigners.

Time saving / outsourcing

• In addition to our extensive know-how, we free up your time. You can rest assured that the tenants and your property are well looked after.
• The costs of managing your property are tax-deductible. Depending on your marginal tax rate, you only pay 60-70% of the management costs.

Construction / Renovations

• We know the market conditions of the tradesmen due to the large number of contracts awarded. In addition, we compare offers to evaluate the best possible offer.
• The craftsmen’s work carried out is checked by the administrator on site.
• We carry out periodic inspections of your property, if desired also with the preparation of a condition report and a proposal for maintenance / renovation work.

Debt collection / Accounting

• We constantly monitor the receipt of rent payments. We take legal action against tenants who fail to pay.
• We pay your bills and mortgages and handle all creditors.
• You will receive semester and annual statements as a basis for your tax return and your private bookkeeping.

PDF Illusion No. 22

Author: Claude Ginesta

Claude A. Ginesta is a federally certified real estate trustee and CEO / owner of Ginesta Immobilien AG. The company was founded in 1944 and specializes in the sale of real estate in the economic area of Zurich and Graubünden. With branches in Küsnacht, Horgen and Chur, the company acts as an estate agent throughout Switzerland for properties with a supra-regional character.

Publisher of the Illusions series Ginesta Immobilien AG, www.ginesta.ch