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Deciding whether or not you will need a property management company to manage your property/ies is tricky, and you’ll need to know the pros and the cons of working with a property manager before taking one route or the other. That’s why the most important step is to understand first what a property manager does.
If you’re entertaining the idea of getting professional help for your rental but you’re still asking yourself ‘What does a property management company do?’, you’re at the right place! In this article, we’ll walk you through what is the role of a property manager and what are their common duties and responsibilities.
What Is A Property Management Company?
Put simply, a property management company is a business that manages real estate assets on behalf of the owner, often with minimal involvement of the owner. Now, a property manager is a licensed staff member in the property management company who usually oversees more real estate portfolios, but you will often find that the terms property manager and property management company are interchangeable, which we also do below.
Property management duties and responsibilities include rental marketing, tenant screening, setting rental rates, coordinating maintenance and repairs, collecting rent, managing budgets, and complying with all rental laws and regulations governed by each state.
Given how complex and time-consuming the management of a rental property can become, rental property owners often prefer to hire property management companies to oversee the daily operations of their real estate assets and to deal with any questions or concerns the tenants may have.
What Does A Property Management Company Do?
Let’s get deeper into what precisely a property manager does. A property manager is responsible for the day-to-day running, management, and maintenance of your rental property.
Property managers make sure the rental is always rented out for the best possible rental value, is well maintained and in great shape, and receives great and caring tenants. Feel free to check out our detailed article on how to hire a property manager to understand the when and why.
Although each property management company establishes what package of services they provide and at times there are stark differences between property management offers, in general, property management companies offer full-service packages, meaning that they are in charge of the entire rental cycle of your property, from marketing the property in order to find tenants, tenant screening, establishing competitive rental rates, tenant onboarding, maintenance works, rental collection, compliance with state-wide rental laws, and tenant replacement.
Property Management Duties and Responsibilities
Let’s take a closer look at the most frequent property management duties and responsibilities and what does a property management company do. We split them into categories for ease of browsing, and we’ll detail each of these below.
Marketing the Property to Find Tenants
The property manager is responsible for marketing a rental property in order to find new qualified tenants. To do so, they will advertise your rental property online on a variety of relevant listings sites. Depending on each PM’s strategy, they may also announce new properties for rent on their social media pages or local directory pages such as Google My Business or Yelp. In short, property managers use a variety of listing platforms to ensure that they will find the best tenant for your property as fast as possible and keep your rental revenue going.
A property manager will also show your property to all interested potential tenants, and in case your property is already occupied, make sure that they coordinate showings with the current tenants. Some property management companies also offer the option of virtual tours of the property, especially considering the more recent safety concerns.
It often happens that more than one tenant will apply for your property, so property managers follow a thorough screening process to make sure that the tenant placed in your rental is trustworthy and reliable. The tenant screening process is a multi-step endeavour that includes the verification of tenant credit history, a background check, and other data that varies from company to company. Lastly, the property manager will also ask at this step for proof of renters insurance, as an added layer of protection for both you and the tenant.
Setting, Collecting, and Adjusting Rent
While marketing your property, your property manager will try to set it up for the best rental value given the current market conditions. If prospective tenants do not show interest in due time, your property manager will adjust the rental rate to a lower level to make sure that they maintain a high flow of interested applicants for your property. Why is that so important? A vacancy is your topmost important liability and number 1 source of rental income loss, and your property manager will try to avoid it at all costs, including a rental rate reduction.
Once a tenant is found for your property and they are onboarded, the property management company will start collecting rent, which is one of the basic responsibilities of third-party rental management. Rent collection is not an easy process, as property management companies have a fault-proof online system of rent collection, as well as lease clauses against late rental payment, to make sure that your revenue is protected. Using online rental payment systems benefits you on multiple plans, as payments are automatically tracked and populated in your online ledger, which streamlines your accounting.
The property management company will also take extra caution in regulating late payments, and having a well-maintained system for processing those. Collecting rent really is exhausting sometimes, but property managers are prepared both in terms of tech and legal expertise to collect it in your name.
Handling Tenant Complaints or Issues
As sad as it sounds, not even the most detailed tenant screening can avoid totally that difficult tenants are placed in your property. A property manager will deal with difficult tenants on your name, without you raising a finger. Whether we talk of late payments or lease compliance issues, property management companies are well equipped with specialized staff and legal expertise to deal with such tenants.
Your property manager is also responsible for the maintenance of a rental property, meaning that they need to make sure that your property is in good condition and well maintained and, most importantly, a safe environment for the tenant.
Maintenance involves solving any issue that your tenant raises as well as regular visits to the property to check if there are any renovations or repairs that need to be attended to. Some property management companies develop preventative maintenance programs, which include regular gutter cleaning visits, and HVAC inspections.
But the best part about hiring a property management company is they have a vast network of professional, licensed vendors that they can use for repairs, and that they are often able to obtain serious discounts from these vendors by virtue of their professional relationship. Which saves you money at the end of the day!
A property management company has a department that takes care of crunching the numbers for you and makes sure you are getting the profits on time and at the market value. Accounting services involve setting the right rental rates, calculating added costs, depreciation, and taxes that need to be paid. This also entails determining profit margins and the budget to accomplish your goals.
As a result, they collect rents and pay invoices while monitoring expenditure, and take corrective actions to make sure to maintain a healthy balance between your expenses budget and your rental income.
Many things could go wrong in the span of a tenancy, whether it’s the property or the tenant. From repairs and renovations, to lease violations, there are many cases in which you need to be boots on the ground as a landlord.
A property manager will be the boots on the ground for you for all these situations. Property managers go the extra mile in making sure that your property is well maintained, safe, and that your tenant obeys the clauses in the lease, by organizing periodic, move-in, and move-out inspections. Let’s start with the periodic inspections.
Periodic inspections – the main role of these inspections is in preventative maintenance, meaning that the property management team tries to spot problems as soon as possible and minimize your expenses and maximize tenant happiness and their willingness to prolong their lease.
Your property manager will send a specialized vendor team to assess the property condition, and if there are any needs for repairs, renovations, or refurbishing. They will also be able at the time to observe if the tenant respected the terms of the lease. In case of lease violation, such as illegal subletting, or illegal extra residents, they will inform you and take decisions either on your behalf or in collaboration with you.
Rental property inspections have never been more necessary than they are in this day and age where you may rent out your property to an unreliable tenant. To avoid tenants abusing your property and breaking the lease agreement. Read more to learn;
Move-in & Move-Out Inspections – The property manager will conduct a move-in and move-out inspection for every single tenancy, as a means to document the state of the property and to be able to deduct from the security deposit for damage to the property beyond normal wear and tear. Move-In and Move Out inspections can be very detailed, and they include full accounts of the state of the property, pictures, and sometimes videos.
Property management duties also include handling tenant turnovers. Turnovers are complex activities that comprise repairing, refreshing, and re-marketing your property to a new tenant. The first step includes, of course, the move-out inspection we talked about above. Immediately after that, the property manager will get busy with any maintenance issues and repairs.
Concomitantly, they will hire professional vendors to do touch-ups to all interior paint or repainting if necessary, work with professional cleaning companies to do some deep cleaning of carpets ( if needed ), and replace appliances if they are in a bad condition. All these repairs are not without a goal: the property manager will strive to improve the curb appeal of your rental property in order to market it for the maximum rental rate given the existing conditions.
Let’s recap, shall we?
If you were wondering ‘What does a property management company do?’, we hope that you now know that they are professional companies responsible for the day-to-day running, management, and maintenance of your rental property and that more often than not, they offer full-service packages in which they take care of the entire rental cycle on your property, from placing a tenant, to replacing them at the end of a lease term.
In general, property management duties and responsibilities can be split into 8 categories:
- Marketing the property
- Tenant screening
- Setting, collecting, and adjusting rent
- Handling tenant issues and complaints
- Property maintenance
- Periodic inspections
As an investor or out-of-state landlord, you probably do not have the time to manage your property, so we highly recommend that you hire a property management company to act on your behalf. Let us know if you have more questions about choosing a property manager, we’d be happy to help!