Achieving financial independence is the dream of many, and one of the ways to do that is through a passive income stream generated through real estate investing. When investing in more than one real estate property, it can be beneficial to hire a property manager, as they can take on the majority of responsibilities surrounding the upkeep and day-to-day operations of your investment properties. If you’d like to know more about what property managers can do for you, read on.
What Do Property Managers Do? 6 Questions Answered
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1. Do Property Managers Collect Rent?
The collection of rent is a basic responsibility that anyone who owns a property they rent out is going to need to do, and handing over that responsibility to a manager can free up a great deal of your time. Their responsibilities can include the following:
They can be tasked with setting the rent at the right level for the area that will help attract tenants to the property. To determine where to set the rent, the manager will look at the market in which the property is located and analyze the rent amounts for comparable properties in the area.
Most management companies will have a system in place for collecting rent. Sometimes it’s online; other times, it can be mailed in or automatically deducted from a tenant’s account. The manager will not only collect rent when it is due but will strictly enforce any late fees.
Rent tends to go up year after year, and your property manager can increase the rent each year according to the state and/or municipal law in which the property is located. They can also decrease the rent if market forces dictate that type of action.
2. Do They Manage Tenants?
Managing tenants is a core responsibility of any property manager. Depending on how much responsibility you want to give your manager, they can take over virtually all tenant management duties.
They will help fill vacancies by advertising the rental and creating a compelling ad. It’s their job to know what attracts tenants, so they can also provide you with tips or advice to help makeover the property if the need arises.
Along with finding tenants, management will help screen prospective tenants, including running credit checks and criminal background checks.
Handling Lease Details
If you’re not well-versed in the law regarding leases, don’t worry – property management companies are. They can set the lease term and make sure all the necessary verbiage is included in the lease to protect you.
Dealing with Evictions
Evictions don’t happen often, and they can be difficult to deal with if you don’t have experience. If a tenant doesn’t pay their rent or otherwise breaks the terms of the lease, property managers know the right way to move forward with an eviction.
When a tenant moves out, someone needs to inspect the unit to check for damages and determine what portion of the security deposit will be returned to the tenant. After the move-out, that same entity will be responsible for cleaning the unit, making any necessary repairs, and finding a new tenant. This can be accomplished by you if you have enough time on your hands, but it’s often better left to property management.
3. Who Handles Maintenance and Repairs?
Arguably, one of the most useful roles for a property management company to fill is handling maintenance and repairs. No matter how new the appliances are, or how quality the construction of the home, normal wear and tear is going to result eventually.
Preventative maintenance to keep things functioning in good condition is critical to saving money down the road. Property managers are responsible for hiring exterminators and landscapers, as well as tradespeople who can check for issues that may be on the horizon.
When an issue arises, management will either fix the problem themselves or hire someone else to do it. They typically have a large network of reliable tradespeople from which they can draw.
4. Do They Handle Emergencies?
Handling emergencies is one of the times when property managers can really show their worth. To your management, an emergency is anything that endangers a tenant’s wellbeing, such as loss of heat, a gas leak, water leak, etc. Sometimes these things can occur as a result of normal wear and tear, but other times a natural disaster can strike and cause serious damage.
Whatever the case, emergencies can sometimes be avoided through the use of preventative maintenance, but not always. It’s under these circumstances that your management can really help out.
5. Can They Help Supervise Other Employees?
Depending on the type of property you choose to invest, you may have other employees who work on the property, such as a concierge or security guards. If there are other people working on the property, it’s up to property management to make sure that they’re doing their job. Property managers can hire, fire, and set the salaries of these other employees.
6. Can They Look After Vacant Properties?
Management of your properties can be as “hands-on” or “hands-off” as you want. If you have vacant properties that don’t need much care other than monitoring, property management can do just that. They can monitor properties to make sure no vandalism occurs and can perform routine maintenance, so the empty property doesn’t fall into disrepair. They can also monitor other repair people or contractors to ensure that the work is getting done satisfactorily.
In the end, property managers can do just about anything when it comes to maintaining your investment properties. What responsibilities, if any, you choose to keep for yourself will depend on how involved you want to get in the day-to-day comings and goings of being a landlord. While hiring a property management company to maintain your properties may not be necessary for every investor, they do provide a valuable service that can make your life a whole lot easier.