Hiring a rental manager for your real estate investment is a truly personal decision. Only you know the needs of your business and what your pain points are. If you’re considering hiring a rental manager, it’s important that you go into the process with a clear understanding of how they might help you, as well as why you might not need to work with one.
A rental manager handles the day-to-day responsibilities of running a rental property. This can include supervising work orders and maintenance, making sure rental units are cleaned in between tenants, and leasing vacant properties, among other duties.
From collecting rent to finding renters, there are a wide variety of responsibilities that a qualified rental manager can take on.
Rental managers are able to manage all aspects of setting and collecting rent. After conducting market research, they’ll be able to set a fair but profitable rental price. Once your apartment is rented, they’ll also be responsible for collecting rent checks.
Rental managers are also capable of finding tenants and drafting leases for your property. Fully experienced in marketing rental properties, interviewing tenants, and conducting background and credit checks, rental managers are able to quickly find responsible and reliable tenants. After this process is complete, they can draft and present tenants with a lease.
One of the many tasks related to rental management is answering maintenance requests made by tenants. Rental managers handle all maintenance orders, whether they’re routine or emergency calls.
In some cases, a rental manager can offer property owners investment advice. For the investment-minded real estate investor, it can be helpful to get advice from professionals who have an ear to the ground of the local real estate market and who know what potential renters are looking for in a rental property.
Rental managers can provide property owners with monthly expense reports as well as earning statements. They also have the skills necessary to manage the budgetary concerns of a property or multiple properties.
There are a variety of laws and regulations you must adhere to when renting out a property. Rental managers are familiar with local, state, and federal regulations as well as fair housing regulations. A rental manager’s expertise can help you avoid lawsuits by making sure your property is up-to-date and in compliance with these regulations.
Additionally, a rental manager will be educated in both renters’ and landlord rights. For example, if you have a tenant who needs to break a lease early or if you have a tenant who causes extensive damage to your property, they’ll know how best to address it.
According to Buildium’s 2020 Rental Owners’ Report, some of the biggest pain points for real estate investors are maintenance and repairs and filling vacancies. As mentioned, a property manager can help you with both. Here are a few other areas in which hiring a rental manager can boost the health of your business, as well as your happiness as a property owner.
Many property owners prefer to be heavily involved in the management of their properties. However, a fair number of investors have full-time jobs outside of their rental properties and like the idea of using their rental properties as sources of passive income. If this resonates with you, then working with a rental manager is a reasonable solution. Rental managers can handle every aspect of managing a rental property, giving you the peace of mind of knowing that your property is well taken care of, your renters are satisfied, and all you have to do is read the earnings statement every month.
Due to their ability to market properties effectively, rental managers are able to shorten the vacancy periods of the rentals they manage. They’ll know where and how to market your property and how to create advertising materials that will attract tenants. Additionally, they’ll know how to properly price your rental based on your area and the pool of renters you have to choose from. Setting the right rental price is important. If your property is priced too high, you might not get enough applicants. If you price it too low, you’ll be missing out on income.
Lastly, rental managers know how to effectively screen tenants and identify tenants who either have a history of financial trouble or who have a less than stellar rental history. With a responsible renter living in your property, you won’t have to pursue evictions or deal with the costs associated with missed rent. Transparent marketing, reliable tenants, and appropriate rent setting will all shorten your vacancy periods.
With a rental manager taking care of your tenant relationships, you’ll be able to meet (or even exceed) your tenants’ expectations. Many rental managers have a 24-hour service line that will provide your tenants with emergency assistance, should they need it.
Rental managers will also make sure that your property is consistently maintained, limiting the risk of most emergency repair requests. Additionally, many rental managers and property management companies use property management software that provides tenants with an easy-to-navigate site through which they can make routine requests, pay their rent, and directly communicate with their property manager. A tenant who feels listened to is a happy tenant. Working with a rental manager is one way to help them feel listened to and catered to.
When running an investment property as a rental, it’s important that you work with reliable vendors. These can include electricians, plumbers, handymen, painters, and cleaning professionals. If you’re managing your property alone, it can be time-consuming and even risky to find and vet these professionals. How can you be sure that they’ll work quickly, be available when you need them, or even deliver the quality of work that you expect? Hiring a rental manager takes the guesswork out of this aspect of managing a property. Rental management companies have a well-established network of professionals upon which they can call. In some cases, rental managers even have exclusive contracts with vendors, meaning they’ll be at the ready whenever a need for their services might arise.
A good rental manager will be mindful of your needs and goals as a business owner. If you’re hoping to grow your business, they’ll be able to help you strategize which properties to purchase and how to market them to prospective tenants. If your goal is to eventually sell your rental properties, a rental manager will be able to assist you by looking at your profitability holistically and also overseeing any capital improvements or renovations that you need to complete. Rental managers are like the Swiss Army knife of real estate industry professionals. They’re versatile and have a wide variety of skills. All you need to do is tell them what you need and where you want your business to go and they’ll work to help get you there.
While hiring a rental manager is a great option for many property owners, according to Buildium up to 36.7% of property owners don’t work with a rental manager. So, it’s clear that working with a rental manager isn’t the right choice for everyone. Here are a few reasons why you might not choose to work with a rental manager.
For the budget-conscious property owner, hiring a rental manager may feel like an unnecessary expense. However, it’s important to know that there isn’t a standard industry fee for rental management services. Some companies charge property owners based on the size of the rental property, the condition of the property, the type of property (eg. single-family homes vs. multi-family properties), the location of the rental property, or the occupancy rate of the property. The fee you’re charged will also depend on the kinds of services you want your property manager to undertake. If you simply want help finding tenants and managing maintenance requests, your fee will likely be less than a property owner who wants to be completely hands-off.
Property managers either charge a monthly flat fee to manage your property or a percentage of rent. If you’re just starting out as a real estate investor, you may want to consider working with a company that charges a percentage of rent rather than an upfront, flat fee. This is a way to still gain all the benefits of working with a property manager without having to increase your overhead costs.
It’s also important to note that a good property manager will be well worth their cost. For example, by shortening your vacancy periods and helping you set the right rental price, they should be able to offset, either partially or fully, their management fees.
If you’re the kind of property owner who wants to have total control over every aspect of your business, hiring a rental manager is most certainly not the best call. You can always decide to have your rental manager only handle very specific tasks. However, a rental manager won’t always make the same choices that you would. If this is a risk you aren’t willing to take, it might be best to pass on working with a rental manager.
Though there are many qualified rental managers out there, it can be risky bringing an unknown element into your business. Property managers typically cater to multiple clients, meaning their attention could be stretched over dozens or even hundreds of rental properties. If they’re not paying close attention to your property and to your tenants, how can you trust that they want what’s best for your business? What’s more, if you hire a property manager who’s less experienced, you may find yourself in hot water with the IRS or even worse, facing a lawsuit.
So, how can you be sure you’ve found a reliable rental manager? This process in and of itself can be time-consuming and confusing. There are so many questions to ask and it can be difficult to know where to begin. But, with the help of an online search tool, you can find vetted and certified rental managers who offer reliable, professional service.
It’s important to find the best property manager for your needs. Check out our guide to finding the perfect property manager, here.
Hiring a rental manager isn’t the right choice for everyone. However, in many cases, the pros can outweigh the cons. Whether you’re considering turning your property into a source of passive income or you’re just having a difficult time filling your rental, you might want to consider hiring a rental manager.
If you’re ready to hire a rental manager, you can get started here!