What Does a Property Manager Do, and Do I Need One?
What does a property management company do? A property management company is responsible for ensuring the rental properties in their portfolio are run according to the owners’ specifications. Property managers supervise and coordinate maintenance work and deal with all issues related to procuring and maintaining reliable tenants.
A commendable property manager’s skill set encompasses business acumen, effective communication, and sound organizational capabilities. They should be personable, resourceful, and proactive in nature, able to balance people and business management. Considering hiring a property manager or wonder how do property management companies work? We can help.
What Is a Property Management Company?
If a property management company is a business that maintains and oversees the operation of land, real estate, and residential and commercial property. So then, what is property management? The latter refers to running the daily operations of a unit of real estate.
Depending on the size of their portfolio, a property management company will assign a team or manager who is responsible for tenant occupation, timeous payments, budget management, and property maintenance.
While sometimes considered pricey, the cost of hiring a property manager is tax-deductible against income generated by the property. The scope of their duties and responsibilities varies from client to client; corporate property owners may provide a manifesto, whereas individual owners may offer verbal guidance on how they want their property managed.
Types of Property Managers
Commercial Property Managers
These managers specialize in real-estate used for commercial means and are familiar with the large-scale management of office blocks, retail and industrial buildings. Their role requires an impressive level of organization and the ability to liaise between multiple tenants and building owners.
Multi-Family Property Managers
These managers oversee apartment complexes, taking on many responsibilities on behalf of a landlord. They maintain renter satisfaction, ensuring the building is in good condition, and perform the usual duties of a property manager.
Single-Family Home Managers
These managers are employed by real estate companies, who own real estate investments and rent them out for additional revenue. They generally manage homes in areas dominated by high-turnover rentals, for example, holidaymakers.
What Do Property Managers Do?
Property managers possess working knowledge of the market the real estate operates in, as well as the law, to ensure the legal management of property and tenants. Some states require them to be licensed real estate brokers, while others accept a qualification in property management or require no qualification at all.
Setting competitive rental prices is part of a property manager’s job. They will typically assess the market value, competition in the area, and the cost of repaying the mortgage, if applicable. Rent prices are based on a percentage between 0.5% to 0.8% of the property’s total value. Additional amenities, access to transport, security, and the socio-economic makeup of the area will influence rent price.
Marketing Your Property
Hiring a photographer, creating listings on multiple platforms, and reserving slots for viewings take up time. A reputable property manager will create quality marketing content, signage and be available for open viewings. Nowadays, all property managers and companies should be versed in social media marketing or have a dedicated in-house employee to handle online marketing.
Screening and Finding Tenants
For most landlords, screening and finding tenants is a long process. Thankfully, this is a core component of what property managers do. Property managers invest time in this stage to ensure tenants are reliable, responsible, and trustworthy. While minimizing vacancies is key, safeguarding your investment from the headache of bad tenants will always beat the loss of cash during a vacant month.
Collecting rent is the most critical factor in sustaining cash flow. Property managers communicate expectations through clear rent policies, handle collections, late payments, and evictions. It is their responsibility to set a collection date and stringently enforce late fee policies. Securing the right tenants and using efficient payment processing practices ensures real estate investments remain well-oiled.
Managing Maintenance and Repairs
How does property management work when it comes to maintenance and repairs? They either use an in-house team or hire contractors to complete the work for them. Property management agencies will keep real estate healthy, presentable, and operational. This includes carrying out repairs, inspections, painting, cleaning, and gardening. Good property managers retain efficient communication with tenants to ensure they stay on top of maintenance issues.
Managing the Budget
Property managers handle all property-related payments. They prepare a property’s annual operating budget and work closely with the owner to maximize rental income and ROI. When preparing the budget, they will factor in ongoing expenses, repairs, maintenance, and administration costs. A property manager is also expected to prepare periodic financial reports on the building’s financial condition, as well as its income and expenses.
Knowing Landlord-Tenant Laws and Regulations
Compliance with state and federal law is crucial to the success of property rental. For owners with multiple properties in different states, this can be overwhelming. This is where it’s advantageous to hire a property management agency as they understand the laws, ordinances, and regulations pertaining to real estate, including compliance with fair housing and discrimination law.
Saving Your Time and Money
What do property management companies do? They work to protect real estate investments and guarantee the steady flow of passive income. Like all businesses, they ensure your investment makes money by finding the optimal ratio of costs and revenues. On the practical side, they run the operation, so you don’t have to, saving countless hours of procuring tenants, doing maintenance, and balancing the books.
Communicating With You About Any Nuance of Your Property
Property managers are more frequently at their clients’ properties, and so it befalls them to communicate concerns and suggestions for improvement. The revenue generated from real estate is directly dependent on the quality of management. Those with experience can reliably predict opportunities and challenges that may arise, as well as provide possible solutions.
How do property management companies work? The good ones work closely with property owners and developers to keep tenants happy, maximize income and add value to cities through sustainable real estate management. If you need a property manager, 33 Realty can help. With our experience, you can expect 100% occupancy and 100% satisfaction. To find out more about our comprehensive property management services, contact us.