In basic terms, an apartment property management company helps property owners take care of and rent out their apartments. If you’re an apartment owner renting (or considering renting) your property, you’re probably wondering if you should hire a property manager. To make that decision, you’ll need to better understand how much they cost, the benefits they provide, and how to find the right property manager based on your needs. Let’s tackle each of these considerations one at a time.
First, let’s see if you could benefit from hiring an apartment manager. New investors, and even long-time property owners, may think they want to “go it alone.” Make no mistake, that’s certainly an option. But, you may find that the management of your apartments becomes overwhelming before too long. Here are a few situations that would make hiring a property management company a smart decision.
Many landlords and property owners treat their apartments as a source of secondary income, choosing to work a full-time job in addition to managing their property. This becomes too much for one person to handle. Hiring a property manager can be a huge time-saver and stress reliever. While you’re at work, on vacation, or enjoying time with your family, your property manager can take care of the mundane tasks associated with renting out your apartment properties. Plus, if managing your rental isn’t your main gig, why would you want to answer midnight emergency phone calls? Let your apartment manager take that off your plate.
If you live away from your apartment properties, it won’t be easy to handle maintenance requests or to show your property to potential renters. In emergency situations, having someone close by is a must. Apartment property managers can step in to take care of everything for you, making your apartment a source of passive income. It’s also helpful to have boots on the ground when it comes time to find a new tenant. A local property manager will be familiar with the rental market and know how to price out and market your apartment effectively.
Owning multiple properties can be highly rewarding, not to mention profitable. But, with more properties comes more responsibility and it can be challenging to manage each property with the individual care that they need. This is another time when working with a property management company would be a good fit. A property manager can also help you increase the profitability of your property portfolio. Property managers are experienced in managing expenses. A good property manager will be highly numbers driven and can provide you with monthly reporting on the profitability of your properties. Plus, some property managers offer consultative services that will help you grow your investment portfolio. Property managers know which local properties are more likely to attract renters. When working with a property manager who has a growth mindset, your properties will be profitable and well taken care of.
Let’s say one of those previous scenarios fit your situation. Now you may find yourself saying, “Ok, that’s all great. But what exactly does a property manager do?” The short answer is, an apartment property manager’s responsibilities can depend on the needs of the property owners. But typically a property manager takes on the day-to-day operations of maintaining an apartment. Those tasks can be finding renters, answering maintenance requests, and managing the office duties that go along with leasing properties. Occasionally, legal issues pop up with tenants. Property managers can handle those situations too.
Marketing an apartment, screening leads, interviewing candidates, and then signing renters are all tasks that can be handled by an apartment property manager. An experienced property manager knows how to price rental properties appropriately and target the ideal tenant through targeted marketing. Sometimes, property owners may be less likely to catch red flags in a prospective renter’s financial profile or rental history. Hey, we get it. Life is busy and things fall through the cracks. But, a property manager has the experience and the processes in place that are needed to screen clients. Allowing a property manager to take on the responsibility of sourcing tenants can ensure that more reliable and responsible renters move into your apartment.
One of the most important jobs of a property manager is to keep track of all documents related to your apartment. It may sound simple, but whether you own several properties or just one, making sure all of your paperwork is in order can be both time-consuming and confusing. Between background checks, credit checks, leases, expense reports, pet addendums, and maintenance requests, each apartment requires quite a bit of administrative work. A good property manager can use their favorite management software to keep all of these files organized and easily accessible for future reference.
From overflowing toilets to leaky faucets to malfunctioning light switches, there’s no end to what can go wrong in a rental property. Property management companies frequently have a dedicated list of maintenance vendors that they rely on who respond quickly to maintenance calls. This takes the guesswork out of sourcing and hiring plumbers, electricians, etc for your apartment. Plus, in some cases property management companies own and operate their own, in-house team of maintenance workers. In this case, they have even more control over the quality and speed of maintenance services. This keeps your tenants happy and your property well-maintained. Making sure that your tenants feel listened to and taken care of is the easiest way to keep your investment rented and profitable. As an added bonus, it takes finding and dealing with maintenance professionals off your to-do list.
Apartment property managers are well-versed in local, state, and national laws regarding tenant and property owner rights. If a tenant violates the terms of their lease, damages the property, or otherwise misuses the apartment, having a property manager on hand to handle the legalities is a life-saver. Should you ever have a legal issue with a tenant that needs to be resolved, a property manager will have the skill level and experience necessary to handle the situation quickly and professionally. This skill has become even more important in recent months. The pandemic has shown us that staying up to date on local and national laws is not only important, it’s crucial. Landlords are responsible for knowing and obeying federal housing laws, including the Fair Housing Act and the Fair Credit Reporting Act. Landlords are also responsible for obeying state rental laws regarding discrimination, leasing, disclosures, and privacy. With the ever-changing legal landscape and the impact COVID-19 has had on eviction moratoriums, it’s important to have someone on your team who knows how to navigate shifting regulations and legal changes.
In addition to their more obvious job responsibilities, you may find that hiring a property manager has additional bonus perks to offer.
Owning investment properties can be stressful enough without all the responsibilities that come with property management. It’s simple: the less you have on your to-do list, the less stressed out you’ll be. When you hire a specialist to take care of your tenants’ needs, you won’t be responsible for answering late-night calls, emergency maintenance requests, late rent collection, or any of the other stressful situations that can crop up when you manage a property. Instead, you can rest easy knowing that your property is taken care of and making you money.
Every property has its own life cycle. In the first stage, property managers advertise the property, find a new tenant, and draft a new lease. When the apartment needs to be re-listed, property managers make sure the apartment gets clean, return the security deposit to the previous tenants, do market research, and then finally put the unit back on the market to attract a new tenant. In between these two stages is, of course, the time in which the property is rented and making you money. Keeping properties rented and occupied for as long as possible is key. A professional property manager plays a critical role in keeping your property rented by finding and vetting qualified tenants quickly and managing the property effectively to maintain tenant satisfaction. As a result, your property will have shorter vacancy periods and higher profitability.
Once you’ve decided to hire an apartment property manager, it’s important to find the right one.
Property management costs depend on the location, property type, and the management company itself. In general, most companies charge a percentage of the rent on occupied apartments. This can range from 6-12% on average. Additional fees may be charged for marketing, though some companies charge flat monthly rates for their services. Though you should definitely negotiate the terms of your contract with your prospective management company, it’s important to be mindful of the fact that in the long run, working with a property management company should increase your profits.
While your choice of property management company may be dictated by your budget, don’t sacrifice experience level to save a few dollars. An inexperienced company may mark up repair costs or fail to attract tenants in a timely fashion. An experienced company will be well worth the cost of its contract.
From leasing your property to receiving your monthly rental income, property management software enhances the whole process of running a rental property—especially the communication surrounding it. This kind of software makes the renting experience better for your tenants, too. Using their resident or tenant portal, your renters will be able to make their rent payments easily and directly contact your property manager for maintenance issues. This software can help you as well because it can give you access to a number of accounting and leasing or maintenance reports, usually in a portal designed for your needs. Having quick access to this kind of information 24/7 will help you, as the property owner, make sure your investment is profitable and on track.
Don’t be afraid to ask your prospective management company for references. Using a trusted website that vets its property management company listings is a great way to go about this too. You may also want to find out if they belong to any professional organizations such as the National Apartment Association, which offers development courses and training for its members.
Treat this search just like any other job interview: interview multiple candidates. Ask your prospective property managers about their policies and procedures, their renting process, and their fee structure. Find out if they specialize in any one kind of property and ask how many properties they currently manage. Through this interview process, you’ll be able to get a feel for what companies in your market have to offer and at what cost.
If you need some help managing your apartment, working with an experienced, reputable apartment property management company can help you increase your property’s profitability while reducing the time and energy you need to personally commit. That said, not all property managers are created equal, so it’s important to do your due diligence and hire a property manager that’s reputable, professional and will make your rentals successful in ways you didn’t even imagine.