So you’re wondering if you need a property manager. Not all rental properties do. But, if managing your property is causing you confusion or stress, it’s a good idea to consider your options. Buildium’s 2021 Property Owners’ Report gives insights into the needs of rental property owners. Their research showed that rental owners' demand for services from property managers increased 4.3% between 2019 and 2021. In other words, property owners just like you are relying on property managers for more services than ever.
First, let’s discuss what exactly a property manager does. Then, we’ll dive into some of the reasons you might want to hire one and the different types out there. Lastly, we’ll go over some extra benefits that a property manager can provide.
Professional property managers can wear many hats. Your property manager’s responsibilities will ultimately depend on your specific needs, however, a property manager can take care of all the tasks associated with running an investment property, from day-to-day tasks to finding new tenants.
When it comes to managing a property, you’ve probably noticed that mundane, everyday tasks can add up. Property managers can shorten your to-do list by taking care of things like rent collection, managing the accounting and bookkeeping, scheduling landscaping, and addressing tenant complaints. In other words, they allow your property to become a truly passive source of income.
With any luck, your properties won’t need major repairs. Still, it’s inevitable that your tenants will occasionally need the services of a plumber or electrician. If you’ve been on the receiving end of late-night phone calls for maintenance requests, you might be relieved to pass those calls off to a property manager. Property managers have a fully vetted list of contractors at their disposal to take care of all maintenance needs, fast. In other cases, property management companies have their own, in-house maintenance team that they directly manage. In this case, maintenance requests are handled with even more speed and efficiency. With a property manager keeping tabs on your investment, you can also be sure that your property will never fall into disrepair. They’ll make sure that gutters are cleaned, roofs are repaired when needed, and water heaters are inspected, so you won’t have to.
Finding tenants can be one of the more challenging parts of being a property owner. The process of finding new tenants is time-consuming, frustrating, and stressful. Finding a tenant involves conducting market research on rents of comparable properties, completing background and credit checks, asking for references, drafting a new lease, and more. And what happens if your choice of tenant doesn’t pan out? Property managers have the ability and know-how necessary to make this process efficient and effective. Your property will be rented quickly to responsible tenants, making your investment more profitable.
Unless you are a lawyer, understanding the intricacies of rental laws can be overwhelming. As you probably know, there are specific laws pertaining to tenant and landlord rights on a national, state, and local level. If you are managing your property yourself, it’s important to know what your obligations are as a landlord and to stay on top of any changes made to the laws that address these responsibilities. A property manager tracks that information so you don’t have to deal with all the red tape. For example, if your tenant wants to break their lease early, your property manager will know how to proceed based on what local and state laws require of landlords in that situation. In the ever-changing rental climate created by the recent pandemic, it’s become clear that staying up-to-date on renter and landlord rights is crucial.
One of the ways you can help your property stay profitable is to occasionally upgrade it. For example, prospective residential tenants are attracted to properties that feature new, energy-efficient appliances and upgraded bathroom fixtures. Having your rental property improved in these small ways can allow you to raise rent prices while still attracting tenants. A property manager can oversee the hiring of contractors and any construction necessary. They’ll also be able to help you create a budget for your capital improvements and stick to it.
While you may be managing your property on your own just fine, there are many reasons why hiring a property manager may be the right decision for you.
If you have a “day job,” you have to place a premium on your personal time. A nine-to-five job takes up enough of your life. Hiring a property manager will free up your time, allowing you to earn money on your property without overcrowding your schedule.
If you’re new to the world of real estate investment, the learning curve can be steep. From learning how to conduct market research to developing a network of trusted maintenance workers, there’s a lot to take on. Hiring a property manager can relieve you of the stress that comes with learning a new trade. Plus, you’ll avoid the pitfalls that can come with being a new landlord, saving you money in the long run.
If you’re having a difficult time filling vacancies, a property manager can help you out. A property manager can handle the leasing process from start to finish. First, they’ll know the rental market that you’re dealing with. They’ll know how and where to market to renters. They’ll also know how to price your rental properties so that renters feel like they’re getting a fair deal and you’re making a profit. Then, they’ll oversee a deep cleaning of your property, stage it so it’s attractive to potential renters, and make sure any and all cosmetic repairs are completed before potential renters come to visit. After leading a series of showings, they’ll be able to help select potential tenants and gather all the necessary background checks, credit reports, and rental histories needed to make sure you’re renting to reliable tenants.
Many landlords first get into real estate investment in their 20s and 30s. Eventually, those young investors grow older and many move away from their investment properties, making the job of being a good landlord a bit more complicated. In this instance, hiring a professional property manager is the perfect solution. A local property manager will be able to keep tabs on your property, stay up to date on local market changes, and be your eyes and ears on the ground so you can sit back and relax.
If you’ve been a real estate investor for some time, you may own multiple properties or even whole buildings. The administrative work, maintenance, rent collection, and leasing of multiple properties can swamp even the most seasoned landlord. A property manager will keep your investments on track and will prevent anything from slipping through the cracks. With their experience in real estate, they may also serve as a good resource if you are looking to expand your portfolio, as well. Having an organized, numbers-focused property manager on your team can prove to be handy when you’re growing your rental property business.
When hiring a property manager, consider searching by area of specialty and portfolio type. As you know, each type of property comes with its unique challenges, so look for a property manager well versed in your specific kind of property. For example, a property manager who strictly works with apartment rentals may not be the best choice if your investment property is a single-family home.
An apartment property manager helps property owners maintain and rent out their apartment properties. Whether you own a single apartment or have invested in an entire apartment building, working with a property manager who specializes in the intricacies of apartment management can make the real estate investment process stress-free. If you rent to college students, having a property manager taking care of your apartment can be useful. Student renters may need help finding roommates for their off-campus housing. A property manager can help match student renters, which is an invaluable resource for both you and your tenants. Plus, an apartment manager can help you navigate the occasional downsides to renting to students. For example, many students don’t have much of a credit score. A property manager can help you by walking your future tenants’ through the process of getting a cosigner, ensuring that you’ll receive a consistent rent check.
Multi-family property management takes a special skill-set. Managing a multi-family property entails keeping individual tenants as well as the larger group of renters happy. With more units, you’ll have more maintenance issues and more sensitive tenant issues, but you’ll also have the opportunity to provide a more community-oriented living environment. A multi-family property manager will keep your tenants happy and your multi-family property running smoothly.
Running a single-family rental entails more than just finding tenants and receiving rental checks. A single-family rental property management company will maintain the property, keep the property up to date and well maintained, will inspect the property, handle all accounting, and also manage all tenant relations. Using their rental market expertise, they’ll be able to keep your rental occupied while also helping you reach your goals as an investor. Whether you own a single home for sentimental reasons or you own multiple single-family properties, a single-family property manager will know how to help you navigate the ever-changing rental landscape in your area.
A professional HOA (Home Owner’s Association) management company manages the needs of a community that shares the same space in some way. This manager will help guide and consult with the HOA’s board of directors, handle all administrative services and accounting for the HOA, and will engage in site management. In many cases, they’ll also be responsible for managing the budgetary needs of the community and enforcing community policies and bylaws.
Managing a commercial property requires a different set of skills than residential properties. A commercial manager will handle the day-to-day management of your building, build relationships with tenants, fill unoccupied spaces quickly, manage the financial accounting of your investment property, and also help you by investigating development opportunities in your area. Through their unique knowledge of the commercial sector, they’ll be able to provide you with sound investment advice, if you’re considering expanding your portfolio of commercial properties. They’ll also be able to oversee any major renovations you make or any build-outs you approve for your commercial tenants.
In addition to their standard list of responsibilities, property management companies are capable of managing more than you think. In fact, Buildium’s 2021 Rental Owners’ Report shows that some rather unexpected services experienced a large jump in demand over the past two years. Between 2019 and 2021, services like accounting, bookkeeping and taxes; financial reporting and benchmarking; and property inspections all became more desirable to property owners. You may be surprised to know that property managers can do all of these things.
Before listing a vacant property, experienced property managers will conduct market research and develop a strategy for attracting prospective clients. With an exhaustively researched plan in place, your property will be leased quickly, making your vacancy periods short.
Once your property is listed, property managers can help find the perfect tenant. An experienced property manager will have a well-organized tenant screening process that catches any red flags. Your property manager will also be fully up to date on fair housing laws, assuring that your property is rented fairly and legally. Lastly, once a qualified tenant has been selected, your property manager will draft a new lease and finish the leasing process.
You may consider yourself an excellent landlord, and you are probably right! But, many tenants are attracted to properties that are overseen by property managers. This frequently has to do with the fact that property managers are experts at marketing properties, meaning they’ll know how to attract tenants. But just as importantly, properties that are managed by a property manager tend to experience a lower tenant turnover rate. This is largely due to the fact that property managers are quick to respond to emergency and maintenance requests, are good communicators, and are mindful of the unique needs of tenants. Through their excellent customer service, property managers are able to keep tenants happy and content, leading to tenants resigning their leases. Rentals that experience less tenant turnover are less frequently relisted, making them more profitable.
With a competent property manager on board, your property should be a lucrative money maker. Happy tenants make their payments on time and frequently resign their leases. Routine maintenance checks conducted by your property manager will help you avoid any surprise (read: pricey) repairs. Additionally, with a low turnover rate and low vacancy period, your rental property will stay profitable. Property managers will, of course, charge a fee for their services. However, a property management fee is typically well worth the cost considering the money-making benefits of utilizing a property manager’s services.