What is a property manager?

What is a property manager?

According to the latest statistics from TrueList 44% of landlords choose to hire property managers to manage their properties. The 45% of landlords who manage their properties themselves report high levels of stress, low profitability and difficulties in keeping tenants for long periods.

This guide will help you understand the types of property managers that landlords can choose from, what they do, how much their services cost, and if working with one is the right choice for you.

What is a Rental Property manager?

Let’s start with a simple definition to ensure that we are all on the same page. What exactly is a property management company?

A property manager is an expert in real estate who manages the rental property for the owner. Property managers are in charge of rent collection, maintenance, repairs, tenant screening and lease agreements.

Five types of rental property managers

It’s important to know that all property managers are not created equal. To help you choose the right property manager for your needs, we’ve divided them into five different categories.

The “Friend” Property manager

A property manager who is both a friend and a business associate, someone you know well with experience in managing properties. This is not a formal partnership, but rather a request for a favor. While there is little or no upfront fee, you will also be at the bottom of your friend’s list. This arrangement is not recommended to meet your property management requirements.

The Side Hustler

You may find a side hustler working for another company. However, the company doesn’t have to be a property manager. This could be a real estate or investment company with a small department of management.

This property manager manages properties that their firm is interested in purchasing. They are not usually involved in the day-today operations of a property, and they don’t provide hands-on services. They don’t manage the property, but rather keep it in the back of their mind for when you (the owner), decide to finally sell.

The One-Man Band

One-man or woman-bands are highly motivated and meticulous property managers. They are a one-man or woman team, qualified and have experience in property management. These property managers may have left a larger firm in order to offer a more personalized and robust service to their clients.

This property manager may be brilliant but their pricing is higher. The higher price may be worth the customized services and innovative solutions that can save you money and increase your property’s value.

#4: Small-to-Medium-Sized Property Management Company

The small-to-medium-sized property management company is generally locally or regionally focused. The property manager is the only point of contact for your property. They work with an admin team that can support them. They can take over if your property manager is sick or needs a few days off.

Property management companies manage 100 to 500+ property portfolios, whereas individual managers (and the admin team) typically manage 100 to 200. They are also members of NARPM if they manage residential property. This allows them to constantly improve their skills, stay up-to-date on laws, and keep abreast of other relevant practices.

#5: Large or Departmental Property Management Company

This category includes most national brands with an average of 500 to 1,000+ properties. The large or departmental property managers can offer lower prices for their services because they are more efficient.

Larger companies have multiple property managers that handle different aspects of management. This is a good option for routine needs, and it can be cost-effective. However, owners of property should realize that the managers can’t give each property much attention.

You are not sure which type of property manager is right for you yet? Learn more on the various options.

What do property managers do?

Property managers are responsible for the daily management of a building. What a property manager actually does can be highly customized to meet the needs of every property owner.

A property owner may choose between a number of services for property management, including:

  • Advertising and marketing the property
  • Renters can view the property by showing it to them
  • Checking the background of tenants
  • Supervising the repairs and inspections on a property
  • Coordination of renovations
  • Tenant complaints and disturbances are resolved.
  • Rent collection and payment processing
  • Preparing financial reports
  • Keeping financial records
  • Handling evictions
  • and more

What do property managers cost?

can vary greatly due to the flexibility of the services offered. Property owners can expect to pay between 8-12% of the monthly rental price of their property plus any expenses.

Most property managers charge in two ways: a fixed monthly fee, or a percentage based on the rent. Many property managers offer a variety of services depending on the needs of the property owner.

You can expect to pay a small percentage of your profit to a property management company if you are a hands-on owner who wants to delegate specific tasks to them, such as tenant screening and recruitment, or annual inspection fees.

If you want to delegate the majority of your day-to-day property tasks to a manager, then that’s what you should do. You’ll be paying closer to 8-12% of the monthly rent value in this case. Your property manager will then turn a vacant apartment into a rented one as quickly as possible. The property manager will cover all marketing costs, the application process for tenants, maintenance and late payments.

Property owners are usually required to pay a small fee for the initial setup.

Do you need a rental property manager?

Ask yourself these questions as a landlord to see if you require a property manager.

  • This is your only job.
  • Do you own any other property?
  • You are new to real estate investing?
  • Do you have trouble finding or keeping renters?

These answers will help you decide if hiring an property manager is the right next step.

Four Reasons Why You Should Hire a Property Manager

There are a number of reasons why you should partner with a professional property manager. We’ll still outline the four most important reasons for you.

Renting at the Right Rates

When advertising your property, it is important to set a competitive and fair rental rate. Research what is typical in the area and for your type of property. All Property Management’s Rental Calculator will help you to make the right decision. Partnering with a professional property manager can make setting your rent and marketing your property easy.

#2: Recruit, Attract, Manage Tenants

Finding great tenants and keeping them can be one the most difficult aspects of managing an investment property. It’s important to have a system that works for attracting quality applicants. You also need an application process that is strong and a property your residents will enjoy living in. Property managers already have tried and tested systems, so you don’t need to start from scratch.

Third: Make sure compliance

Property management is not just about following a few simple rules. If you rent out your property, it is important to comply with all local laws and housing regulations. The laws are different in each state. This can make it difficult, but a good property manager knows how to comply with the laws.

Maximize Profitability

Property managers maximize owners’ time and money. A professional property manager can be invaluable to you if you are looking to grow your portfolio or manage one property.

Property management professionals can use their expertise to find you the right tenants and next investment.

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