The most important information on the subject of sub-management. The management of rented condominiums requires know-how and experience. This blog provides an overview.
Many people are already familiar with the term "investment flats", "retirement flats" or "flats for rent". In the current low-interest phase and the current real estate prices, some people are considering investing in real estate and buying one or more flats. In doing so, it is important to consider the potential of each individual flat and whether all tenancy law provisions are complied with. Regardless of whether it is one or several flats (flat package or apartment building), finding reliable tenants and renting them out in a legally correct manner is time-consuming.
A distinction is made in the management of rental housing between:
Keeping track & meeting deadlines
If you own one or more flats, you have to think about how to keep track of everything. At the beginning of the month, the rent including operating costs and possibly value-added tax is received, from which the operating costs and, if applicable, the value-added tax (often only applies to several flat rentals) must be paid on time. In property management, there is a personal supervisor who monitors this and one trust account per property or owner.
Leases have their beginning and, depending on the investment strategy, sometimes their end. In order not to miss this, it is essential to let the tenant know in good time (3-6 months beforehand) whether notice is to be given or whether the lease is to be extended on other terms. If the paragraph on expiry is not correctly noted in the tenancy agreement and neither the landlord nor the tenant contact you in good time, the tenancy agreement will be extended; if this happens more often, the agreement may even become an open-ended tenancy agreement. We always recommend concluding a new contract upon renewal, as there may already be changes in tenancy law after the expiry of the fixed term.
If there is no extension, the time of return must be determined and the conditions in which the property should be located must be discussed. More on this in a later point.
If the rent does not arrive as agreed, the operating costs must still be paid. The tenant should then be contacted and, if necessary, receive a reminder. If the rent is not received after a timely reminder, it is necessary to recognise an emergency as such (e.g. eviction action) and to deal with it correctly and quickly. This is so that any loss of rent or damage can be limited as much as possible.
(Housing) vacancy is a big issue. No one wants to have a vacant property in their rental investment strategy. That is why an appropriate rent level and the recognition of potential and sustainable value appreciation is crucial for a good return.
Knowing the rental contract and important clauses
Much is already regulated in tenancy law, so the more you include in the tenancy agreement, the better. However, there are also many clauses that are inadmissible. So if there are points in the tenancy agreement that contradict current case law, the tenant can have these points declared invalid. In addition, there are certain formal requirements and time limits (e.g. for residential tenancy agreements of at least 3 years) that must be observed.
It also makes a difference whether from a tenancy law perspective:
Professionals and craftsmen with handshake quality
As the media also report, it is becoming increasingly difficult to secure the next generation of trainees in craft trades. It is often very difficult to find good craftsmen. In the case of damage, the time of repair can often prevent worse, or many things can be done wrong during renovations. A good network of reliable professionals should therefore ideally be in place.
Checking and correct charging of the operating cost account
The landlord is obliged to settle the operating costs with the tenant once a year, except in the case of flat-rate rentals. A credit note or additional payment can then be made annually. The statement of operating costs should be checked to ensure that all payments have been correctly accounted for.
Regular assertion of a value protection clause
In order for the indexation clause to be enforced, it must first be correctly agreed in the tenancy agreement. Then it is possible to assert a value retention according to the CPI (consumer price index) in the agreed interval and, if applicable, threshold value. The value at the beginning of the lease or the value of the last increase counts as the starting point. If the value retention is not asserted, the landlord often loses a not inconsiderable amount of rental income, especially in the case of strong increases in the CPI.
Those who document protect themselves
Once all contractual matters have been settled, the deposit paid and the first rent transferred, the property is handed over. During the handover, the actual condition is documented and the meter readings are taken. We use a detailed protocol for this, in which the meter readings, the number of keys, the deposit, the energy certificate, any defects or things that still need to be remedied are noted. There are also documentation photos. When returning the property, as mentioned above, it is advisable to agree earlier on the condition in which the property is to be returned. A distinction must be made between normal wear and tear and above-average wear and tear, in order to be able to charge for this if necessary. Since there are often discrepancies here, experience and knowledge of current case law is of great advantage.
Keeping an accountingdepartment
Renting generates income from letting and leasing. This is taxable, although some expenses are also tax-deductible. We keep an overview of the account, as well as any maintenance, and send everything together with invoices directly to the owner or the tax advisor.
Correct custody of the deposit
The landlord or property management company is obliged to keep the deposit received "safe and fruitful". This means in an account separate from the private/corporate assets with deposit protection and interest. We have a separate blog on the topics of restitution and for the deposit here: https://ifin.at/blog/die-kaution-ruckgabe-des-mietobjekts
Maintaining a good tenancy for both sides
Renting out a flat that you originally lived in is often an emotional matter and you like to have a closer relationship with the tenant. However, if we are talking about an investor flat, a "healthy" distance from the tenant does no harm. Getting to know each other naturally creates more trust. As property managers, we are the contact between landlord and tenant. In the case of several flats, this not only saves time, but also protects against the "personal connection" when questions, defects, non-payments or similar occur.
There are still several points that need to be considered. We will be happy to take time for your project and arrange a personal appointment. If you have any questions, please feel free to contact us by phone or email.