You’ve likely heard of property managers, whether you’re an investor or a renter, or simply curious about real estate. But what exactly does a property manager do? The duties of a property manager go beyond what you might expect. They often do more than collect rent.
Let’s take a look at some of the responsibilities property managers have and what you can expect from them if you choose to work with one.
What is a property manager?
Property managers are individuals or entities that the property owner hires to manage and oversee the day-to-day operations of their real estate investments. The responsibilities of a property manager include collecting rent and handling maintenance requests, filling vacant units, and possibly setting the budget for the property.
Real estate investors often hire property managers to manage properties they are unable or unwilling to manage. Depending on the needs of the owner, a property manager could be either one person or an entire company.
What do property managers do?
Hiring a property manager is a way to protect your passive income and real estate investments. Property managers are hired by investors to manage their rental properties. This can be for many reasons: from a need to hire a local professional, to handle the property, to a desire for a more hands-off approach to their properties.
What does a property manager or company do to manage the properties they manage?
Let’s look at some common responsibilities that property managers typically have.
1. Handles maintenance requests
Property managers or companies can also handle maintenance requests and in-person upkeep. Tenant frustration can be caused by a slow response from a landlord to maintenance requests. It is important to have a manager on-site to address tenant concerns promptly.
There could be many maintenance requests that can be made, including repairs to appliances or unwanted pests and wildlife on the tenant’s property. It is important to have someone available to address these issues when they occur. Tenants may abandon their rental property if they don’t have landlord support.
2. Follow landlord-tenant laws and regulations
It can be hard to keep track of all the landlord-tenant laws and regulations when you are an investor. By taking care of all regulations, a property manager can save you from potential legal headaches. Property managers are usually experts in their area of expertise and can often deal with local laws and regulations better than others.
In some states, there are specific requirements regarding the number of security deposits that a tenant may be required to pay. Property managers who are familiar with the area may be better equipped to ensure tenants are charged the right amount. This is in contrast to property owners asking for deposits beyond the legal limit, which could lead to a legal problem.
3. Collects and deposits rent
As part of their duties, property managers collect and deposit rent. Property managers and companies may collect rent online or through payment apps in order to get the money to the property owners faster.
Property managers can also manage collections, delinquent payments, and evicting renters. These tasks can be complicated for investors and require a property manager to help them efficiently. This will save the owners time and money.
4. Acts as a local presence for out-of-town owners
Property managers are also able to act as a local experts for owners who live far away. If a property owner who has lived in Texas all their life may not be able to manage property somewhere they are not familiar with like New York or California.
They can have the details taken care of by a property manager, as well as other issues such as maintenance or other operations that are difficult to manage remotely.
5. Shows and leases vacant units
A property manager can help owners avoid the financial loss that comes with having an unoccupied unit for a long time. Instead of trying to reach potential tenants remotely, a property manager can help with Tenant placement or renew leases.
Tenants might be hesitant about moving into a property without first seeing it. If the owner is out of state, showing properties to potential tenants may not be possible. Owners can have a property manager present to address any problems and show potential tenants the potential spaces.
Pros and cons of hiring a real estate property manager
You have both benefits and drawbacks to working with a property manager to manage your investment properties. Consider the pros and cons of hiring a property manager before you make a decision. Also, think about your budget and personal needs.
The pros of hiring a real estate property manager
- Investors who have multiple properties can benefit from this service. It is difficult to manage multiple properties while keeping tenants happy. A property manager will ensure that tenants and properties get the attention and work they deserve, even if you aren’t available.
- You can invest in other locations: Working with a property manager/management company has the advantage of allowing you to invest in properties that are far from your home without having to manage everything remotely.
- You are not responsible for the operation of your property. Another benefit to having someone else manage it is that they take care of all maintenance and upkeep. Instead of trying to fix all the repairs yourself, you can trust a property manager or their maintenance team to do it for you.
The cons of hiring a real estate property manager
- You must give up some control of the property. This allows you to avoid the hard work of managing a property but it can also mean that they might do things differently than yours.
- Property management fees are high: As we mentioned above, the cost of a property manager is not free. You will likely be charged multiple fees for their services. These fees can vary in cost but they tend to represent a substantial portion of your monthly rent. Before you hire a property manager, make sure it fits your budget.
- The screening process can be less rigorous than you would like. Property managers are often responsible for screening tenants who want to live on your property. Property managers may be less strict than the screening standards you use to screen tenants. This can be a problem for some real estate owners.
The bottom line: Property managers are trusted with great responsibility
Real estate investors may not live near their properties or have the time or the ability to manage them. Property managers can help. These services are not free and might not be suitable for all real estate investors.
Before you decide to hire a property manager, take into account your personal and financial needs. Also, consider the property’s needs. Then decide if you are comfortable allowing a third party to manage the investment.