An experienced property manager handles all aspects of managing a rental property, including communicating with tenants, ensuring rent is paid and dealing with maintenance issues.
Rental properties come with a lot of responsibilities. Consider hiring a property management company or manager to relieve yourself of some of these duties. Rental properties are managed by property managers on a day-to-day basis. A property manager helps landlords avoid many headaches by understanding landlord-tenant laws, collecting rent, and handling maintenance requests, so they can concentrate on earning a profit.
The following is an overview of property management, how much it costs, and how it can help you.
What is a property manager?
Property managers are people or companies who handle the daily operations of your real estate investment. The tasks they perform include setting rent prices, collecting rent, screening tenants, and handling maintenance issues. There are some states that require property managers to be licensed.
A property manager usually passes along the monthly rent minus their management fee to the property owner. Major maintenance issues or other problems are usually handled by the property manager in conjunction with the landlord.
If you own multiple rental properties or live in another city or state from your rental property, hiring a property manager is a great idea.
What does a property manager do?
There are several reasons why you should hire a property manager. Maybe you don’t want to get involved in the day-to-day operations of the property or are too busy. The stress of owning a property can be relieved by hiring a property manager or property management company. A property manager’s responsibilities include the following:
1. Stay updated on landlord-tenant laws
Landlord and tenant laws vary from place to place, and they get complicated. The rules and regulations can be overwhelming, especially if you’re a first-time landlord.
Property managers can be a huge help in this situation. They are knowledgeable about landlord-tenant laws and can help you avoid any legal trouble. In addition to working with tenants, property managers handle the day-to-day operations of rental properties.
2. Set rental rates
Property managers know the local real estate market and can help you set competitive rental rates. You’ll always be able to find tenants this way.
A property management company can also help owners maximize their rental income by pricing their properties correctly.
3. Find and screen tenants
Obtaining prospective tenants is one of the most challenging aspects of owning rental property. A property manager will advertise the home, accept inquiries from potential tenants, and show the property to renters.
Applicants are reviewed, background checks are conducted, income is verified, and other tasks are involved in screening tenants. This process ensures that your property will have quality tenants and reduces tenant turnover.
4. Collect rent
Property managers are responsible for collecting rent. Rent is collected using a standard process every month to ensure it gets paid on time. Renters may need help setting up online payments or accepting checks.
Rental property managers also take care of late payments and unpaid rent to maximize rental income. Property managers will work with tenants who make regular late payments or miss payments or evict them if necessary.
5. Enforce signed leases
The property manager explains the lease agreement to the tenant. In every lease, there should be a section stating what happens if a tenant violates the agreement, such as by not paying rent or maintaining the property.
Taking action if a tenant violates the lease is the property manager’s responsibility. It might be necessary to communicate with the tenant to resolve the issue or to evict the tenant.
When a tenant signs a lease, the property manager also collects a leasing fee, security deposit, and pet fee. Additionally, they handle lease renewals and collect lease renewal fees.
6. Handle maintenance requests
Tenant complaints, maintenance requests, and tenant concerns are handled by property managers. Owners have one of the biggest headaches when it comes to this issue.
The property manager responds quickly when a tenant needs repairs or has a problem. The company also performs regular maintenance, such as pest control and HVAC servicing.
It is possible that the property manager has an in-house maintenance team or knows about the best local contractors who can perform these tasks quickly, efficiently, and cost-effectively. You will be able to keep your maintenance costs down by doing this.
7. Keep an eye on the property
A property manager keeps an eye on the property when you live in a different city or state from it. If an emergency occurs, they can take immediate action to ensure that the home is maintained.
In addition to being familiar with the area, property managers are also familiar with local regulations and ordinances.
8. Proceed with evictions
When a tenant stops paying rent or violates the lease agreement, a property manager enforces evictions according to landlord-tenant laws.
Landlords benefit from having a property manager handle evictions because they are time-consuming. Depending on local law, the property manager will know how to evict a tenant. The owner of the rental could face legal trouble if he or she does not follow the law properly.
9. Deposit the rent and communicate with owners
In order to maintain good communication, the property manager keeps in touch with the owner of the rental property. You’ll be kept informed about vacancies, rental income, and expenses, as well as problems with maintenance, rent collection, and legal matters.
Owners usually receive a monthly statement from the property manager, detailing income, expenses, and net profit for the month. There are many property management companies that offer online portals for owners to access this information.
In addition to managing rent payments, the property manager distributes monthly rent payments to the owner. As a result, you will have a steady income stream from the property.
The pros and cons of hiring a property manager
Property owners can benefit greatly from hiring a property manager. However, there are some downsides to consider as well. The pros and cons of hiring a property manager are listed below.
The pros
Some of the advantages of investing in property management include:
- There are no headaches with it. Property management can be challenging on a day-to-day basis. All aspects of property management are handled by property managers, including finding and screening tenants, dealing with problems and complaints, and refunding security deposits.
The process saves you time.It takes time to learn the ins and outs of rental property laws and regulations. The same goes for figuring out how to screen tenants. You can leave all of that to your property manager. - It simplifies the process of collecting rent.Rent prices are set and rent is accepted by someone each month, so your investment will yield a positive return.
- You save money this way. Although property management costs money, it’s worth it. Vacancies will be kept to a minimum, and repairs will be completed efficiently, which will save money.
- Your investment is protected. Property managers ensure that everything runs smoothly whether you own one or more properties. A property manager will keep an eye on the rentals and ensure tenants are following their leases.
- Owners who live out of town benefit from it. Having a property manager can give you peace of mind if you don’t live in the city where your rentals are. Property management companies are always on hand and can respond quickly to problems.
The cons
While hiring a property manager offers many advantages, there are a few downsides to consider, including:
- You lose some control over it.Using a property manager relieves you of many responsibilities, but you will lose some control. You may not select the contractor handling repairs, and many smaller repairs may occur without your knowledge.
- It’s an extra cost. You should factor professional property managers into your monthly expenses and decide how they affect your bottom line. Our pricing can be found here.
- It’s an additional step. The process of finding a professional property manager can take time. Before selecting someone to manage your rentals, you should interview a few individuals or companies.
- You are responsible for managing it. While property owners hire property managers to manage their rentals, you will also be responsible for managing them to some extent. Each month, owners should ensure that they are receiving their rent payments according to the property management agreement.
How much does it cost to hire a property management company?
Property managers take on so many of the responsibilities that would traditionally fall on the owner’s shoulders. Along with the management fee, many property managers charge:
- Maintenance fees. A monthly maintenance fee is charged by some property management companies to cover unforeseen expenses. In some cases, you may be charged for repairs, maintenance, or upkeep that come up during the month. Rent deposits are usually used to cover these costs.
- Leasing fees. When a new tenant signs or renews their lease, property managers may charge a fee. It may cover the cost of marketing the rental, reviewing applications, or other tasks.
Lean on property managers
It takes a lot of time and effort to manage property, from advertising to screening tenants to making sure rent is paid to handling repairs and complaints. Owners of properties often find this too much to handle. Therefore, hiring a property manager can save you time and headaches.
It may seem like an extra expense (and it is). It’s well worth it, especially if you own multiple properties. By hiring a property manager, you won’t have to worry about chasing down rent payments or coordinating repairs. You can just sit back and enjoy the return on your property investment.
