“Why should I pay a property management company when I can manage my property myself?” We know that some people resent spending part of their tenants’ rent money on management fees, but we truly believe that we add value and increase the profitability of their property.
A Canadian man who owned property in Israel received a call from his tenants about a leaking pipe, so he called his Israeli insurance company. Two weeks later his tenants sent him photographs of the insurers’ plumbers’ incomplete work – including tiles removed from the floor and gaping holes in the floor and walls. They threatened to withhold their rent and sue him for negligence because the apartment had been left in such a dangerous state. Suddenly managing a property in Israel from overseas became a huge headache. Instead of saving money, he was costing himself more.
Creative Estates Israel was called in to help. We chased the insurers until they got their plumbers to come back and finish the job, making good the walls and floors. We sat with the tenants to hear their grievances and persuaded them not to sue the landlord. We took over the management of the property, negotiated a settlement that was accepted by all parties, and even managed to recover a large sum of money from the insurance company!
We manage another apartment where the insurance company insists that only their plumbers be called. The pipes are a constant problem and the owner is reluctant to rely on second-rate plumbers. That is why we have advised the owner to renovate the property at the end of the current tenant’s lease, to renew the pipes and upgrade the kitchen and bathrooms. Our company will do the work, under full supervision, and even though he will lose 2 months’ income, he will be able to increase the monthly rent for the renovated apartment by 20%. Within a year he should have recovered his costs.
A similar ‘stitch in time’ approach is working well in a building that we manage. All 11 apartments are tenanted, but we have instituted a plan to upgrade 4 apartments at a time until the entire building has been upgraded. There are clear economies of scale involved, and the building owners will be able to increase the rents significantly when the work has been completed.
We recommend a proactive approach as the key to successful property management and profitable real estate investment.
To speak to Creative Estates about managing your property in Israel, contact Shaun@CEIsrael.com