Property managers handle all the heavy lifting and day-to-day tasks of being a landlord so you don’t have to. Specific responsibilities will vary depending on the type of property you own but they tend to fall into the same categories:
- Dealing with tenants
- Handling the property finances
- Maintaining the property
Table of Contents
The Role of A Property Manager
1. Managing Tenants
Your rental property can’t turn into a gold mine without tenants. A good property manager will find, screen, and select the best tenants for your property. They’ll take over handling background and credit checks and verifying references.
With experience on their side, many property managers have an instinct for selecting long-term, reliable tenants who don’t cause problems. Once they’ve chosen tenants, the property manager will handle the lease signing and security deposit.
After tenants move in, the property manager will hear and deal with complaints, maintenance requests, and emergencies (such as burst pipes). They’ll handle problems between tenants (in multi-family dwellings).
When the lease is up and not renewed, the manager will deal with all of the move out issues, from damage assessment to deposit return. In the case of a tenant who refuses to vacate, the manager will know exactly how to handle an eviction.
2. Setting and Collecting Rent
Experienced property managers know the score when it comes to setting rent. They know the area, the property type, your budget, and the prospective tenant pools. With that information, they can come up with appropriate rent that won’t scare away tenants and still leave you with profits—a skill that could take you years to develop.
They can also adjust the rent up or down as the situation calls for; they know the rules about rent increases (which may be strictly controlled by state or local law), and they can adapt rent to changing economic circumstances to make sure your property stays occupied.
Once you have tenants in, the property manager deals with collecting rent, and that includes making sure tenants pay in full and on time. They set dates, grace periods, and late fees—and strictly enforce those rules so you don’t get stuck in a cash flow situation.
3. Property Maintenance
Once you hire a good property manager, it’s their responsibility to make sure the building is safe and regularly maintained. Whether they have in-house taskers or hire out, they’ll make sure everything necessary gets done in a timely and cost-effective fashion.
This includes things like:
- Snow removal
- Trash pickup
- Pest control
You can use a property manager even if you live in one of the units (an owner-occupied property). In fact, that can make your living situation easier because other tenants will call the manager— and not you—when things go wrong.
How To Find A Good Property Manager?
1. Check These Sources
First stop: your real estate agent. They can offer you a list of property managers they and their clients have worked with successfully. From there, talk to other landlords you know in the area, and ask who they use to handle their properties.
Make sure to ask what they like (and don’t like) about this manager, and what kinds of problems they’ve had. If you get the same take on a management company from several different sources, chances are it’s true.
You can also search online for property management companies in your area, but be wary of online reviews. Check the Better Business Bureau for any company that sparks your interest to see if any complaints have been filed against them.
Like any other professional, property managers have specialties, and you’ll want to find one who specializes in the type of rental property you own; someone who runs apartment complexes isn’t the best choice for your single-family home.
2. Check Their Work
One of the best ways to see how a property manager works is to see how they’re handling other properties. For example, look at the “for rent” ads they’re placing for your competitors to see if they look professional. Look at a couple of properties they manage to see if they look well kept. Even more important, talk with tenants. You’re hiring the property manager to make your life easier, and that includes keeping your tenants happy. Steer clear of any property managers where:
- Complaints and repairs aren’t addressed promptly.
- The manager is hard to reach.
- Tenants aren’t renewing their leases because of the management.
3. Eleven Questions to Ask
During your interview with any prospective property manager, make sure to cover all of these key questions:
- How long have you been managing properties?
- What types of properties do you manage?
- What licenses and certifications do you hold?
- Do you have a thorough understanding of landlord-tenant law, including fair housing practices, eviction procedures, and safety codes?
- How long does it typically take you to fill a vacancy?
- How do you vet prospective tenants?
- How many tenants have you evicted in the past six months?
- What services do you provide?
- What are your fees and how are they charged?
- Where are the property funds held and how are they handled?
- How often do you perform property inspections and do preventive maintenance?
These are the minimum questions you need to have answered before selecting a property manager. You can find a more thorough list on the BiggerPockets website (www.biggerpockets.com).
4. Check Certifications
Many states require property managers to hold some type of license or certification (usually to be allowed to show rental properties). Check that any prospective property managers hold the specific documentation required by law (you can do this on the state licensing website).
Find out whether they belong to a reputable trade organization that requires training, certification, and continuing education. Applicable organizations include the National Association of Residential Property Managers (www.narpm.org) and the Institute of Real Estate Management (www.irem.org).