- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
11 Key Tasks You Can Expect A Property Manager To Do
If you have experience in managing property, you’d agree that it can be a lot of hassle to put on your plate. But hiring a professional property manager can really eat into your profits when they charge as much as 12% of rental collected.
Yet sometimes when you have too much to do with too little time, the best way out is really to bite the bullet and pay.
Trust me. It’s fully worthwhile to pay that reasonable price to upkeep operations and keep tenants happy, than to be a miser and destroy your reputation as a landlord by providing poor service.
A lot of real estate investors hire management companies because it don’t just make financial sense, but it makes common sense as well.
- They live too far away from the properties
- They find it too much of a hassle to get acquainted with state and federal laws
- They have no time for managing due to an already tight schedule
- They own several properties that allows them to take advantage of economies of scale
With this in mind, should you hire and appoint a manager?
Whatever you scenario, here are some of the main tasks you can expect a property manager to takeover from you.
1) Determining the rental price
Just because you need to get a rental of at least $900 does not mean that it’s how you price it. Pricing is never that simple.
A capable manager would be able to conduct market research to determine the best price for a unit. If he is an expert in local real estate, he would also have intimate knowledge of pricing sweet spots to imitate.
If you set a target rental to achieve, you might even get feedback of what has to be done in order to attain your targets.
Getting the word out and generally getting maximum exposure for your rental property don’t just take hard work. It can take a certain level of flair as well.
Imagine going into a market you are not familiar with. You’ll need to identify where and how to advertise so as to get the attention of your target tenants.
Getting the artwork for a banner ready can already be a challenge too big for many. Now imagine having to speak “geek” with magazines and classifieds so that your ads meet the technical requirements.
You could of course, hire a real estate agent to help you market the property.
But if you are heading that direction, why not hire a property manager instead who will take on the tasks?
3) Preparation for tenancy
The work involved between the time a tenant vacates and when a new tenant arrives can be humbling.
We are talking about housekeeping, maintenance work, repairs, and even pest management.
You could burn a weekend to take on a hand-on approach yourself and gain a hardly satisfactory result. Or you can give your property manager an ultimatum to get everything professionally done by Monday.
It’s not that far fetched to expect that from competent managers. They have their support networks, deep knowledge of smart fixes, and have probably done it hundreds of times over. And most importantly, they have their reputations on the line.
Just leave it to the professional managers.
4) Screening tenants
The great thing with being an employer is that you can demand your staff to do things that you are not able to do.
A typical example is that many business owners are not great salespeople themselves. Yet they constantly demand their sales force to perform above expectations.
Screening tenants take a certain degree of people skills. Other than that, it can take a lot of work with background checks.
With a manager under your payroll, you can just demand that all due diligence checks are effectively performed.
You can also explicitly inform him about the profiles you prefer and standards you expect so that he can filter everyone. This leaves you with a quality shortlist where you can make a selection decision.
Negotiation might not be a repertoire your skill set. Worry not.
Property managers tend to be great negotiators. In fact, someone who is truly looking out for you might ask for more rental when there is room to negotiate without needing you to say it.
They might even insert terms in the lease or rental agreement favorable to you that you have overlooked.
6) Tenant orientation
Any landlord whose been around the block can tell you the story about that ONE particular tenant who was so fussy that he spent almost a full day trying to orientate him around the house and neighborhood.
Orientation can include things like:
- Teaching tenants how to use appliances
- Reminding tenants about payment dates and other terms
- Administrative work for direct rental deposits
- Even taking them on a tour of the vicinity
- And many more!
When you are the landlord paying an active role in tenant management, there might be a number of things you feel should be done during orientation… but too lazy to execute them.
Well… you can list everything down and let your property manager handle them. Demand it.
7) Rental collection
Granted the best way a tenant pays is by automated deposits into your business account. But depending on the comfort level of your tenants, and also how your manager operates, that might not happen.
The old fashion hand-to-hand method of rental collection seems to be a mainstay in the residential real estate market.
In most cases, landlords have no problem with collecting rentals. But at least 1 in 2 wouldn’t know what to do if a tenant does not pay. Even if a lease stipulates very clearly about late payment penalties, enforcing these terms is a different matter altogether.
Do you have the soft skills and temperament to manage these prickly issues?
8) Tenant management
This is one of the most taxing parts of being a landlord. Are you ready to take on the responsibilities?
Tenants have a whole lot of expectations on the roles of landlords. The only thing they probably hope you overlook is late rental.
The funny thing is that sometimes tenants can be less open with landlords than they are with property managers. Maybe it is something like someone feeling that the boss is less approachable than the direct supervisor.
Making a manager the “middleman” between you and tenants can really open your eyes to their concerns, thoughts, and feelings.
So a manager can often bring more value than you think in this area.
No longer will you need to keep track of maintenance schedules and ad-hoc repairs.
Not only this.
A good manager should be able to conduct thorough inspections to see existing problems and potential problems with a house.
This can help save you from a crippling repair bill when you are able to weed out a potential problem before it grows.
You shouldn’t expect a property manager to do the job of a proper accountant.
But what you can expect is monthly financial statements clearly showing the ins and outs of cash flow.
This would give you an overview of how your properties are performing financially. Other than that, these statements would make your accountant’s job easier. Helping you save money on accounting fees.
11) Comply with regulations
A big reason why real estate investors hire property managers is because they don’t have good knowledge of local laws and regulations. This can be a huge problem in terms of compliance.
A local manager should have deep knowledge of what needs to be done in order not to run afoul of the law.
This will save you a lot of time from learning about them yourself. Keeping tabs of different laws in different states can also be confusing to keep up. This can ultimately lead to grave mistakes on your part.
Even though a good property manager can take a lot of work off your hands, remember that you are still fully responsible and liable for what happens on your property. So don’t get too complacent even when you have a competent manager working for you.