What to Expect from Property Management Companies
Managing a rental home is a full-time job, this is why most people will consider working with a property manager. Consider the time in marketing a house and screening prospective tenants. The time for helping qualified occupants settle in and responding to complaints. Making sure that rents are paid on time is just one of the things to expect from property management companies.
This is why most landlords hand over their housing management to property management companies. They know that managing their property will take more time and resources than hiring a company to do it. So, when hiring a property management company, what should you expect? What are the key roles of the managers and where do your input come in?
This article completely answers all these questions and many more.
But firstly, What are Property Management Companies?
Property management companies are agencies responsible for ensuring that a rented house produces income. They manage them and sustain the day to day maintenance and repairs of the house to preserve its value. The goal of property managers is to ensure the owners make the maximum profit from the property.
(Also read How to Select the Best Property Management Company for Your Rental Properties)
Roles of Property Management Companies
Property management companies handle all the easy and hard work of keeping a house profitable and valuable. They handle the day to day activities, maintenance request, collect monthly rent, and ensure the property owner gets the rental income. They do this while still abiding by local laws and ensuring customer satisfaction. Below are most of the roles carried out by property management companies
Property Marketing
Successfully marketing properties entails complexities that surpass initial impressions. Promoting your property convincingly to a large audience requires some experience in marketing and professional communication. This is one of the advantages of hiring a property manager.
They employ several methods to get your vacant property seen by a large audience. This ensures you get the best-interested occupants for your property. (22 Effective Ways to attract tenants for commercial property)
They employ the use of Ads and sharing with their community. They also promote on multiple online and offline social channels to get pre-qualified candidates. This is one important process in property profiting that is best carried out by a professional.
Tenant Screening & Onboarding
After collecting interested prospects, the property managers handle the screening process. From credit history to criminal record, they evaluate each applicant's information. They do this to ensure you get only quality tenants.
A good property manager will collect high-quality tenants during this process. The tenant will in turn maintain your rental property, and reduce maintenance and repair costs. They will make sure they get tenants who will pay their rent on time. This will eventually ensure a consistently high ROI on your rental property.
Managing Tenants
Who answers the calls when tenants reach out on a leaking roof or a broken pipe? Who manages inevitable disputes between tenants and neighbors? You need a property manager! Dealing with multiple calls and complaints about broken household facilities can irritate you and drain your mental health. (Also Read 11 Proven Strategies for Handling Difficult Tenants and Conflict Resolution)
Besides, handling matters like tenants' disagreements might require a professional demeanor which property management companies can provide. This advantage contributes to making every penny spent on hiring a property management company worth it! Property managers are your representatives to the tenants. This is why understanding how to select the best property management company for your rental property is paramount.
Ensuring Regular Maintenance
Your houses and rental properties are subject to degradation and damage. Basic housing maintenance issues like lawns, pool and window cleaning, painting, etc. keep your house attractive and market value high. A property management company helps ensure all these are well managed.
Plus, they hire local vendors and service providers to fix faults and damages. They can also do this for a reasonable amount thereby saving you some cash. (Importance of Regular Property Maintenance and Inspections)
Frequent Inspections
Regular inspection of a rented home is important for monitoring tenant usage of facilities. You need to check for required maintenance. You can also use the opportunity to build relationships with tenants and remind them of rent payments. Visitations like this may require one to two visits per month.
If you have more than one property, consider the time you will spend inspecting each property monthly. The efforts are enormous but with a reliable management company, the stress will simply roll off your shoulders.
Rent Collection
This is the #1 reason you should hire a rental manager for your house(s). They send constant reminders and ensure monthly rent collection. They also enact late payment charges and court intervention in the case where a tenant does not cooperate. These are all included in the duties of property management companies.
They also ensure proper documentation of each tenant's payment history, pending fees, and transaction records. All you'll need to do is to examine the record and evaluate your profit in the long run. (Rent Collection Best Practices)
5 Benefits of Property Management Companies
With all these expectations at hand, the advantage of opting for property management companies surpasses the extra cost. Below are some of the benefits of outsourcing your rental property management to an agency:
1. Low Vacancy Rate
Keeping your rental property filled requires extra effort. Screening interested tenants is another grind in the park that would test your patience. Luckily, you don't have to worry about getting tenants and keeping your property filled with a property manager. They do all the hard work to ensure your properties are all filled up a the best time possible.
2. Due Rent Collection
The purpose of owning a landed property is for income. Therefore, a delayed or unpaid rent payment can be a thorn in the flesh and a frustrating experience. This can be avoided with a property management company in place. They use professional and effective approaches to maintain due rent payments.
(also read; Everything on how to create and manage a rent roll)
3. Property Value Sustenance
House assets can diminish in value if not constantly maintained. What makes a property valuable is the worth and state of the elements that make up the building. This poses a liability problem as it involves spending extra cash and time regularly. to ensure that all components are fully functional and tidied.
However, a property manager helps reduce the cost and time spent on maintenance. They do this by conducting regular inspections and hiring local vendors for regular fixes to preserve your property value.
4. Legal Expertise
Reduce the risk of legal cases and law infringement with a competent property manager. Chances are that you have little to no knowledge of local and state housing laws. A property management company can be the cover you need to avoid attracting law officers to your doorstep. (15 Legal Considerations For Property Managers)
5. Tenant Satisfaction
To attract and retain tenants in your apartment, their satisfaction must be your priority. Property management companies bridge the gap between you and your occupants and ensure their satisfaction by attending to their complaints, requests, and needs.
Conclusion
Considering the cost of hiring one, a property management company may seem expensive. But, you'll ease yourself the extra burden of managing your rental property by outsourcing the property management to us. At Stutts Properties, we employ effective strategies and the fastest technology to manage your property and keep your revenue high and rolling. Contact us to learn more about our services!
Also, read
CAP RATE; EVERYTHING YOU NEED TO KNOW ABOUT ITS CAPITALIZATION RATE
Sustainable and Eco-Friendly Real Estate
How the Best Property Managers Maximize Returns for Investors
Foreclosure; Everything You Need to Know as a House Owner, a Lender, or an Investor
Frequently Asked Question
·How to Start a Property Management Company?
Starting a property management company requires a solid understanding of real estate laws, financial management, and marketing. You’ll need to draft a comprehensive business plan, acquire necessary licenses, and possibly earn certifications. Building strong relationships with property owners and tenants is also essential for success. Networking, offering excellent service, and gaining a reputation for reliability can help you establish and grow your business.
·Property Management Company Cost?
The cost of hiring a property management company varies depending on the property’s size and location. Typically, companies charge a percentage of monthly rent, ranging from 8-12%. Additional fees may be applied for specialized services such as tenant placement, lease renewals, and repairs. It’s important to ask about these costs upfront to ensure you can budget effectively and avoid any hidden charges that could increase over time.
·Starting a Property Management Company?
To start a property management company, you'll need to gain knowledge of industry regulations, secure licenses, and potentially earn certifications. It’s essential to develop a strong business plan and secure initial clients. Building a reputation through excellent service and consistent communication is crucial for attracting property owners. As you grow, expanding your network and offering personalized solutions will help you stand out in the competitive property management market.
·How Much Do Property Management Companies Charge?
Property management companies typically charge a fee ranging from 8-12% of the monthly rent. Additional fees may apply for extra services, such as leasing, maintenance, or handling evictions. The overall cost will depend on the size and complexity of the property. Be sure to clarify all potential fees upfront to avoid unexpected costs, ensuring a smooth partnership with the management company.
·What Do Property Management Companies Do?
Property management companies handle various tasks, including tenant screening, rent collection, property maintenance, and lease enforcement. They ensure that properties are well-maintained, and tenants adhere to the lease terms. These companies also handle legal compliance, including handling evictions when necessary. By managing the day-to-day operations, they allow property owners to maximize rental income with minimal involvement.
·Can You Negotiate Rent with a Property Management Company?
Yes, tenants can sometimes negotiate rent with a property management company, particularly if market conditions favor it or if the tenant has a strong rental history. The company’s policies and the landlord’s willingness to adjust rent terms play a significant role in the negotiation process. Tenants should be prepared with a valid reason for requesting a rent reduction, such as comparable rent prices in the area or an excellent payment history.
·What Are Bank-Owned Property Management Companies?
Bank-owned property management companies manage properties that have been foreclosed upon and are owned by financial institutions. Their role is to maintain and repair these properties until they are ready for sale. These companies focus on restoring the property’s market value to secure the highest possible sale price. Their services may include basic repairs, cleaning, and ensuring the property remains presentable to potential buyers.
·Do Property Management Companies Pay Upfront for Roof Replacement?
Property management companies typically do not pay upfront for roof replacements. The property owner is usually responsible for the costs associated with major repairs or replacements. However, property management companies will handle the logistics, including sourcing contractors, getting quotes, and managing the completion of the work. They ensure the roof replacement is done according to the agreed terms while keeping the owner informed.
·What to Expect from a Property Management Company?
When working with a property management company, expect them to handle tenant relations, property maintenance, and rent collection. They should be proactive in addressing maintenance issues, ensuring legal compliance, and helping to maximize your property’s value. Communication is key, so a good management company will keep you informed of important matters. They should also help reduce the amount of time you need to invest in managing your property.
