Below is information about the typical tasks that property managers can perform for their owners. It is important to realize that you may only need some of these property management services and many of the prospective companies that you interview may have only a portion of these offerings. Be sure to consider carefully which services you need to manage your portfolio of properties and then you will be able to find the right property management company for your needs. The main areas that companies can typically help with are:
Evaluate the Property and Determine an Accurate Rental Rate
Property owners often need certain tasks performed before they can market their property to prospective tenants. Companies can usually offer services related to:
- Performing detailed documentation of both the interior and exterior including photos.
- Offer valuable recommendations on repairs and cosmetic improvements that would potentially maximize the monthly rent while still balancing a good ROI.
- Gather relevant data on rental rates in the area and collaborate with owners to determine the appropriate rental rate that will attract tenants and still maintain profits. Rental research will ideally cover recently rented comparable properties according to their size and specifications.
- Discuss with owners which rules should be in place to maintain the good condition of their property. For example, the pros and cons of policies related to accepting pets or allowing smoking will be discussed.
- Installation of a lockbox to help facilitate the property to be shown conveniently to prospective tenants.
Market the Property for Rent
One of the most difficult challenges of being a property owner is finding the right tenant for your property. Companies typically have expertise in:
- Preparing the home to be rented like cleaning the home and making the interior appealing or touching up landscaping to increase curb appeal
- Create advertisements tailored to the property and appropriate advertising medium. Some of the most commonly used mediums are print publications, paid and free rental listing websites, fliers, MLS, signs, social media listings
- Collaborate with other realtors and leasing agents to find an appropriate tenant
- Providing a 24-hour customer service line where prospective tenants can listen to detailed information about the property’s specifications
- Field calls from various prospects for both questions and viewings
- Meet potential tenants for showings during the week and weekend.
- Distributing prospective tenants with rental applications that are compliant with fair housing laws and regulations
- Collecting applications complete with application fees
Tenant Screening and Selection
Tenant screening and selection is an important process that should not be rushed. Companies can offer valuable assistance with tasks related to:
- Performing a background check to verify rental history, credit history, identity, and income of prospective tenants
- Grade tenants according to pre-defined tenant criteria
- Inform any prospective tenants that have been rejected
Tenant moves in is a process that needs to be watched closely. If you have too many properties, having a manager to assist you in providing better support to your tenants will be an asset to you in the long-term. Companies usually can assist you with tasks such as:
- Drawing up leasing agreements
- Confirming move-in dates with tenants
- Reviewing lease guidelines with tenants related to things including rental payment terms and required property maintenance services
- Ensuring all agreements have been properly drafted and executed
- Performing the detailed move-in inspection with tenants and having tenants sign a report verifying the precise condition of the property on their date of moving in
- Collecting the first month’s rent and required a security deposit
Even though rent collection seems simple, it can become difficult if the tenant decides to not pay. Companies tend to offer services related to:
- Receiving rent
- Hunting down any late payments
- Enforcing late fees after a specified date in the rental contract
- Sending out pay or quit notices
Evictions can occur in instances where the tenant does not comply with fundamental terms in their lease. It is a common misconception that evictions are only caused by not paying rent. Evictions can also be caused by violating noise regulations or causing severe damages to the landlord’s property. Companies can help with complex issues including:
- Filing relevant paperwork to both initiate and complete an unlawful detainer action
- Representing an owner in court proceedings
- Coordinating with law enforcement to forcibly remove the tenant and the tenant’s possessions from the unit if the tenant is refusing to vacate
Owners have to be aware that legal issues can and will arise in their properties over the years. Having a property management company with legal expertise is vital and will save a lot of headaches in the future. Companies can usually offer legal services related to:
- Referring the owner to a qualified attorney if necessary
- Understanding and abiding by the latest local, federal, and state legislation that applies to rent and maintaining rental properties
Many property owners forget the importance of periodic inspections. Having regular inspections is a way to ensure that the tenant is following the terms of the lease and also not causing further damage to the property. Companies usually can assist with inspection-related tasks such as:
- Performing periodic inspections looking for repair needs, safety hazards, code violations, or lease violations. Inspections should be random and prescheduled to have the most comprehensive results.
- Sending the owner periodic reports on the current condition of the property.
There are many financial issues associated with owning properties. It is important to find a company who can help you with sensitive financial issues including:
- Providing accounting property management services
- Making payments on behalf of the owner that could potentially include insurance, mortgage, HOA dues, and more
- Preparing detailed documentation of expenses on invoices and receipts
- Maintaining all historical records pertaining such as warranties, leases, inspection reports, paid invoices, etc.
- Assembling annual reporting that is structured for tax purposes and preparing any required tax documents including a 1099 form
- Advising the owner on possible tax deductions related to their property
- Distributing simplified monthly cash flow statements with a comprehensive breakdown of income and itemized expenses
Maintenance, Remodeling, and Repairs
A reality of being a property owner is having to deal with maintenance, repairs, and remodeling issues. Companies can assist in a wide variety of tasks including:
- Establishing a preventative maintenance policy to promptly identify and handle repair needs
- Providing and overseeing maintenance crews
- Utilizing an established network of licensed and fully insured contractors who have been vetted for affordable pricing and following local regulations
- Assigning jobs to different parties based on who has the appropriate experience for the job combined with the most affordable prices
- Maintaining outdoor areas such as landscaping, removing trash and debris and leaf and snow removal
- Establishing and monitoring a 24-hour emergency repair phone line
- Overseeing larger renovation or rehabilitative projects such as preparing preliminary cost estimates, providing recommendations on how the project can maximize rental incomes, acting as a general contractor that is overseeing any work completed and getting multiple independent bids for the work to get the best possible price
Tenant Move Out
An important aspect of closing a lease is to be sure each tenant moves out successfully and has not left the property damaged. Companies can assist property owners with tasks related to:
- Providing tenants with a list of any estimated damages
- Inspecting units and filling out a report describing the property’s exact condition when the client moves out
- Returning the balance of the security deposit minus damages, if any, to the tenant
- Cleaning the unit and performing any repairs or upgrades for future tenants
- Changing the locks
- Preparing the property to be put on the market for rent once more
Looking For Something Else?
The aforementioned list is not a comprehensive list of property management services that property management companies can offer; however, it provides a basic spectrum of services that property owners can gain from working with a company. What is important is to assess whether the benefits of working with a property management company also balance with a property owner’s budget. To learn how a property management company can benefit your investment strategy, continue reading the next section.