"Before you start trying to work out which direction the property market is headed, you should be aware that there are markets within markets." ― Paul Clitheroe
Buying, selling, or maintaining a property has never been an easy task. Yet, if done efficiently, this work can turn out to be rewarding. Property preservation involves safeguarding and protecting the properties that are owned by the bank, or those that have been foreclosed or defaulted. Apart from securing, the work also involves preparing the properties for sale. This business is one of the fastest-growing ones since 2010 and is expected to go much more further. The paragraphs below will give you some tips on how to start a property preservation business.
People buy a house, a bungalow, etc., by taking a loan from a bank or any financial institution. Sometimes, unfortunate situations crop up, and people are unable to either repay the loan or fulfill the contract requirements on time. This causes the property to revert to the bank. Many a time, the homes are left in an unmarketable condition. Here is where the concept of property preservation comes up. These companies/services handle the foreclosing formalities and prepare the home for resale. Such properties are called 'real estate owned' (REO) properties. As more and more such abandoned/vacant homes come up, this business keeps expanding, as people are needed to secure and prepare the homes again for future sale.
Your Services Include
It is important that you know what services you will need to provide when you start this business. A brief on the same is given below.
Removal of Debris
- All the debris must be cleared off, especially if the house has been in the same condition since a long time.
- The car should be removed and taken care of.
- Any kind of dangerous material should be very carefully dumped. Please remember to follow appropriate country codes and laws while dumping hazardous material; not doing so may be considered a crime.
- Dispose off all the personal property, like television, stereo, microwave, etc., in storage boxes for a stipulated period. After that, if the items are not claimed, they can be auctioned or dispensed.
- Remember that all the above activities must be done on the instructions of the lender/client.
Removal of Snow
This is based on the requirements of the lender, mostly. If the surroundings are covered with snow and this is causing a major problem, your job would be to shovel off the snow and make the place fit and fine.
Securing the Property
This is a very important step. The entire place must be carefully checked. Look out for these things:
- All the locks and bolts must be changed according to the regulations. This includes deadbolts, slide bolts, padlocks, etc. If necessary, take permission from the lender and have him accompany you for a change of lock, if need be.
- It would be better if you have lock boxes with an assigned code. This would firmly prevent third-party access.
- Any kind of entryway that allows easy access into the house must be sealed off. This can be done with the help of board-ups to secure windows, doors, and ventilators.
- The terrace and balcony areas must be boarded with extreme caution, for this is an easily accessible, vulnerable entryway. Double-check the locks and see if any extra protection, like grills, can be temporarily installed.
- If a fence surrounds the house, see if it can be boarded up with glass spikes.
Maintaining the Lawn
Contact the lawn maintenance services and have them mow and clean the lawn about 2-3 times a month. This again, requires to be done only on the instructions of the client.
Maintaining the Pool
- Not maintaining the pool can cause major problems, like spread of certain diseases.
- The pool must be drained, cleaned, and refilled with water periodically.
- Chlorine or any other necessary chemical must also be added regularly.
General Cleaning Services
- This involves the entire cleaning process to be done, including sweeping, dusting, vacuuming, scrubbing, and mopping. Call on some good janitorial services to get all this done.
- Clean out all the bedrooms, bathrooms, hall, dining area, kitchen, the study, the library, and even the garage. The house must not look jaded and old.
Plumbing, Draining, and Sealing
- This job has to be carefully done. One of the main and vital duties here is to drain and seal the pipes so that they do not freeze and burst during winter.
- Drain the plumbing and heating systems.
- Shut off the main water supply, disconnect the water meter, and place it in the corner of the garden.
- Also, disconnect the feed pipe leading to the main valve.
- Use air pressure to clear the water system, and use an antifreeze mechanism to protect the system.
- Turn off the gas and electricity.
After all these jobs are done, label them accordingly with the date so that they can be done again on an appropriate date the next time.
Whatever services have been provided, detailed photographs of the same should be duly sent to the lender/client. The photos will indicate how regularly and efficiently the services are being done.
Steps to Start the Business
Choose a Name
Establish your company first. Choose a good corporate name; something that will attract clients.
Apply for a License
Here is a very important step. You need to be legally registered to start any business. So, get to your local office and apply for a business license. Submit all the required documents.
- This is a huge step. You need to complete a lot of banking formalities before actually getting down to work.
- You will be working with banks and lending institutions, and they will require you to have the essential documents. An important one among them is the general liability insurance policy. This is a must-have when you start this company.
- Next, apply to the REO department of important banks. If you want them to sit up and take notice of you as an independent service provider, you need to establish ties with them.
- A summary needs to be submitted to the REO department to get requests for a proposal (RFPs). The banks can procure this from different sources, but you must first get noticed in order to receive contracts.
Get Acquainted with the Basics
- Start learning the tricks of the trade. Ideally, if you are up for starting this company, it indicates that you are already aware of what services are expected of you. However, you need to know this in minute detail.
- Download a training start-up guide, and here, you will be explained every little detail.
- You will come to know about different banks, lending institutions, REO asset management companies, realtors, investors, insurers, the various cleaning services that you will be needing in the course of your work, etc.
- You will learn how to contact the right people, price your service properly, and establish your business effectively.
- Once your self-training period is over (don't take too long!), you can start contacting the companies immediately. Again, these include the major banks, mortgage lenders, realtors, and REO asset management companies.
- Ideally, the banks which you have applied to, might contact you if they come across a proposal. Act on this contract immediately, for this is an ideal opportunity.
- For this, you need to be well prepared with all your services in place, but do not let go of the offer to showcase your business acumen and skills, as there is intense competition in the market, and you may not get a second chance. This is how you will build contacts, and over time, accumulate goodwill and reputation.
Market and Expand
- This is the most important step. You need to know how to sell yourself (not literally), I mean, market yourself.
- To start at grassroots level, establish a professional presence on the web. Create a website for your company.
- As the business expands, you can create a personal blog too, through which you can market your company further.
- Join online financial networks and directories, and advertise your business.
- Use social networking and digital media platforms to let people know about your services.
- There are many online forums and sites through which you can communicate to companies and generate contacts, prominent among them being the property preservation directory and the foreclosure cleanup network.
- Through the Internet, you will also understand how much competition you are facing in this business.
- Market yourself beautifully, mention your professional qualifications, depth of knowledge, etc. All this must be worded efficiently enough to attract clients.
Starting a property preservation business is neither an easy nor a difficult task. It all depends on your skills and abilities. Do not expect profits and contracts to pour in immediately, every business takes time to catch up, and you will indeed face some hurdles in the beginning. But, make it a point to learn from every instance, and better your services. Who knows, one day you might be one of the top echelons of this business in the market!