What are Your Risks When Property Management Functions are Outsourced?
In an effort to cut corners and save costs, many Property Management (PM) firms have begun outsourcing their operational functions. Some common outsourced functions include the preparation of Property Condition Reports (PCR), Routine Inspections, Lease Preparation and Lease Renewals as well as Trust Accounting. Based on research, here are some risks and dangers involved:
1) Security of Personal Information
A key concern with outsourcing is in ensuring adequate protection and security of personal information being transferred/ accessed by a third party vendor.
2) Overturn of Key Personnel
When a key personnel from an outsourcing company leaves, it would expose everyone to errors in the process. There are no guarantees that key personnel will stay on in a company.
3) Corporate Culture
The service provider may not understand the Property Management's corporate culture or objectives, resulting in actions that are inconsistent with the firm's policies and procedures.
Or they may understand, but disagree with the PM's objectives and strategies. Service providers may believe that superior specialist knowledge gives them the right to do what they think is best for all despite what the client may want.
4) Dispute resolution process
If something goes wrong in the chain, the blame game that commences will not only be time consuming but could proof costly as well. Has the PM company ensured that the dispute resolution process is firmly in place to account for any disagreements?
If the property manager engaged is not doing the routine inspections, how would they know if the property is being kept up to mark? They will be reading the same inspection report as the owner - without actually even seeing or being at the property. Imagine the risks of managing a property without seeing it for years on end? This is currently taking place all across WA.
Considering these issues amongst others, TCS, a company built on solid reputation for over 65 years, chooses to protect our valued Owners to these exposures and will not compromise our loyal customers, just to lower our costs. If you wish to speak to us further on this matter, please feel free to contact our Property Managers for a detailed explanation.