What Does a Property Manager Do?
What Does a Property Manager Do?
If you’ve ever held rental property, you already know that property management requires a significant time investment, as well as extensive care and upkeep. Hiring a trustworthy property manager helps alleviate some of the many responsibilities you face. But, what does a property manager do?
When you choose to outsource the administration of your rental property to professional property managers, you are relieved of the daily hassles of dealing with renters, staying up to date on laws, and taking care of the many details that come with rental properties.
What Is A Property Manager?
Property managers specialize in ensuring that a property is run according to the owner’s instructions. But how does that translate to their day-to-day responsibilities? Property owners engage a real estate property manager to oversee the activities, upkeep, and management of their properties. Marketing rentals and locating tenants are among their responsibilities, ensuring rent prices are appropriate while covering taxes and expenses, collecting rent, and adhering to rental rules.
Types Of Property Managers
It’s impossible to define property manager-specific tasks because they will differ according to the type of real estate managed, the amount of money they are paid, and the management contract’s terms. Here are the most common types of property managers:
- Single-family home property managers work for real estate investors who keep their properties and rent them out to supplement their income.
- Multi-family unit property managers are used to oversee complexes like apartment buildings. These professionals must have excellent customer service skills and perform the typical tasks of a property manager.
- Commercial property managers are experts in real estate used for businesses or business-specific operations. These executives may be well-versed in industrial or administrative settings.
What Does A Property Manager Do?
So, you know the types of property managers, but what do property managers do? The short answer is, they play several vital functions in assisting rental property owners. What a property manager does typically revolves around marketing your rentals, collecting rent, addressing maintenance and repair concerns, dealing with tenant concerns or complaints, and even pursuing evictions, saving you time and stress. Furthermore, a competent property management firm brings expertise and experience to your property, providing you the peace of mind that comes with knowing your investment is in capable hands. Finally, because a management firm is an independent contractor, you won’t have to deal with the headaches of becoming an official employer. The most notable duties that a property manager performs include:
- Determining the appropriate rental rates
While looking online to check what other landlords are charging for comparable properties is an intelligent approach to get a sense of your rent, a reputable property management firm will do a complete market analysis. An overpriced rental property may stay unoccupied, whereas a rental property that is underpriced may attract renters who are resistant to rental market rises. A skilled property manager can assist you in determining the appropriate rental rate to balance maximum monthly revenue with a low vacancy rate.
- Marketing your property
A professional property management firm has produced hundreds of advertisements; they know what to say and where to market to attract the most prospects quickly. Thanks to their scale, they can negotiate lower advertising costs and often have your ad up in hundreds of venues within hours.
- Specializing in locating high-quality renters
An essential service a property management firm can give is tenant screening. The property manager may handle all of the technicalities, such as performing criminal background and credit checks, confirming employment, and gathering references. A seasoned property management firm has seen hundreds of applications and understands how to efficiently assess crucial information about candidates and spot any red flags. Allowing a management business to handle the tenant screening protects you from discrimination claims that may arise from different screening methods.
- Ensuring monthly rent payments are collected and deposited on time
The only way to have a constant revenue flow is to collect rent on time every month, and renters must realize that this is not negotiable. You create a buffer between yourself and the renter by employing a property manager, who will be the one to collect rent and, if necessary, evict unreliable occupants.
- Maintaining and fixing the property
Proper upkeep and repairs keep renters happy and protect your investment. Property managers have ties with maintenance workers, contractors, suppliers, and vendors that most homeowners do not. Property managers handle repairs, verify that the job is done correctly, and negotiate the best price for you. All of this implies less stress for you because you won’t have to deal with crises in the middle of the night.
- Knowing the current housing and tenant legislation
A professional property manager is up to date on the most current landlord-tenant rules, ensuring that you are not exposed to a lawsuit. The cost of property management can be more than offset by the cost of avoiding a single lawsuit. Each state has its own tenant-landlord laws, which, along with federal law, address a wide range of issues, including:
- Tenant vetting
- Guaranteeing property’s safety and condition
- Handling evictions
- Enacting lease termination
- Managing security deposits
- Ensuring rent is collected and deposited
- Avoiding high renter turnover
- While the impacts of unpaid rent are apparent, other equally significant issues are associated with a high tenant turnover rate. Deep cleaning, lock changes, wall painting, and minor repairs are all part of the turnover process. Furthermore, there is the time and work involved in promoting, exhibiting, screening, and settling in a new renter. Sourcing new tenants is a time-consuming and costly process that you can avoid if renters are happy with their living space. A competent property management firm will have proven tenant retention practices in place to guarantee that your renters are happy and remain longer.
In exchange for their services, most property managers charge a portion of your property’s monthly rental cost. The fee is usually between 8-12% of the gross monthly rent, generally less than the money you save by employing a professional to look after your home. While it’s true that hiring a professional property management firm allows you to focus on the important things, you still want to know what’s going on with your rental property. A competent property management firm will keep you informed about any concerns or necessary upgrades and make it simple to access the information you need.
When Do You Need A Property Manager?
While there are numerous benefits to employing a property management firm, it’s not the right choice for everyone. Here are some considerations to help you decide whether hiring a property manager is right for you.
- You have several rental properties
You’re more likely to reap the benefits of a property management firm if you own several rental properties with multiple units.
- You don’t live near your rental property
If you live out of state or reside a substantial distance from your rental property, employing the services of a property management company can provide the necessary assistance in dealing with the various difficulties that you will be unable to address from afar.
- You want your rental to provide passive income
Perhaps you relish the challenge of finding suitable renters and the satisfaction of keeping a secure and appealing home on your own. But if not, you likely see rental property ownership as purely a passive income-generating investment and want little (if any) involvement in the daily duties or day-to-day operations of your properties. If this is the case, consider hiring a property manager to handle everything for you.
- You have a limited amount of time
Even if you like hands-on administration, you may not have much time to spend on your rental property, especially if it isn’t your day job. A management firm can be a smart investment if you’re simply too busy to deal with the property on your own.
- You do not want to be a employer
You become an employer if you hire a resident manager or other staff to help you manage your property. You’ll have to deal with payroll as well as a slew of other legal obligations and concerns. However, because a property management firm is not your employee (it’s an independent contractor), and neither are the individuals who work for it, you can escape the headaches of being an employer.
- Your home is a part of a low-income housing program
While admirable, things can quickly get complicated if you join an affordable housing program. Typically, the landlord receives financial help in the form of a grant, low-interest loan, or tax credits in exchange for committing to rent at least part of the property to tenants with incomes below a particular threshold. Low-income housing landlords must follow a rigorous set of regulations to continue receiving help. With so much on the line, hiring a property management business specializing in this type of housing program is worth the money.
How AAOA Can Help
The American Apartment Owners Association’s (AAOA) duty is to represent landlords, real estate brokers, property managers, and real estate owners across the country. Property management for rentals can be a difficult task and our objective is to help make the property management process go as smoothly as possible. AAOA offers a variety of services, including tenant screening and background checks, as well as landlord rental application forms and financing. Contact us today to learn more.