Landlords who lack the time and expertise to manage their rental property can always turn to a property management company. But, what property management services do these companies typically offer?
The Need for Property Management Services
Property management is no simple task. While there are owners who prefer to take the DIY approach, there are many more who would rather outsource the job to a trained professional. One might wonder why a landlord would even bother to pay someone else to manage their property. After all, that would mean less profit for them. But, there are several reasons why an owner would choose to avail of property management services.
What is the purpose of property management companies? Property management companies make it significantly easier for landlords to accomplish their duties. Essentially, property management companies take over the day-to-day management of rental properties.
Landlords may want to hire them for one of the following reasons:
- The owner/landlord does not have enough time to devote to property management.
- The owner/landlord lacks the skills or expertise to manage their rental property.
- Hands-on property management just does not interest the owner/landlord.
- The owner/landlord owns several investment properties (whether in the same area or not).
- The owner/landlord does not live near the rental property.
Clearly, there is a demand for professional property management. But, what do property managers do anyway?
What Services Do Property Management Companies Provide?
Property management companies come in all shapes and sizes. Some offer all-around rental management services, while others only offer a select few. Additionally, the exact nature and extent of services landlords receive from their company will depend on their agreement. These services must be expressly outlined in the property management contract to avoid misunderstandings.
What services does a property management company provide? Though it can vary from one company to another, owners should generally expect the following:
1. Rental Rate Setting
First up on this property management services list is the rental rate setting. Owners don’t always have a good understanding of the rental market in their area. This often leads to setting a rental rate that is too high or too low. Neither is beneficial for landlords, as too high a rental rate can turn off potential renters and too low a rental rate can result in a net loss.
A property management company can perform thorough market research of the local area to determine the optimal rental rate. Of course, they will also factor in the rental property itself. For instance, if the property comes with nice amenities, that could drive the rate higher. With a professional setting the rental rate, landlords can maximize their earning potential while retaining quality tenants.
2. Property Listing and Showing
Listing a property online may sound easy, but there is a lot more that goes into it than it seems. A property management company can create a compelling ad for the rental property and accompany it with visually appealing photos. Companies also know which channels and websites to use to truly widen the search pool.
If there are any interested tenants, a property manager can take over property showings as well. This eliminates the need for landlords to be on call for the entire time the property remains vacant.
3. Tenant Screening
Tenant screening is one of the more common property management company responsibilities. Companies know just how valuable a good tenant can be, but they are hard to find. Thus, they use established screening strategies to separate the bad tenants from the good ones. A typical screening process involves background checks, credit checks, and employment checks, as well as calling previous landlords for reference.
4. Tenant Application and Move-in
Once a tenant shows interest in the property, they can apply for it. Companies already have application forms tenants can fill out. They can also take care of drafting the lease agreement according to the specifications of the owner. From there, they can facilitate the signing of the lease and ensure a smooth move-in process for the tenant.
5. Property Inspection
As part of their services, property managers will conduct property inspections on a routine basis. This is to identify any potential maintenance issues early on and remedy them before they get out of hand. It also acts as a way to ensure the tenant has not damaged the property. In addition to routine inspections, property management companies also perform move-in and move-out inspections, complete with reports and photos for documentation.
Property inspection is an important part of managing a rental. As such, owners should include it on their list of non-negotiable property management duties and responsibilities.
6. Rent Collection
Rent collection is one of the more typical services for property management. It is almost impossible not to find a company that collects rent on behalf of the owner or landlord. As rent is the primary source of a landlord’s income, it is easy to see why it is a staple of property management services.
Property managers will make sure that tenants pay their rent on time. In addition to handling rent payments, managers will impose late fees and send pay or quit notices.
7. Tenant Management
If a landlord only has one tenant, fielding their calls comes relatively easy. But, many landlords manage several tenants at once, making it immensely difficult to keep track of them.
A property management company has the required resources and manpower to deal with all of those tenants combined. They have established systems that classify each tenant and tag service requests to individual accounts. Property managers can also act as the point person, taking calls from tenants in place of the owner, including emergency calls. That means no more waking up in the middle of the night to constantly ringing phones.
8. Budget Management and Reporting
Professional property management services also normally offer financial management. This involves managing owner and tenant funds, carrying out maintenance and repairs while staying within the budget, and even submitting monthly financial reports to the owner. Moreover, property managers will often be the ones to send out payments to vendors and other parties, including insurance providers, contractors, and HOAs.
9. Property Management and Maintenance
Another one of the more common property management company services is maintenance. By hiring a professional, owners need not worry about constant property maintenance and repairs anymore.
On top of conducting regular property inspections, property managers will coordinate with maintenance personnel (either in-house or third-party vendors) to get issues fixed early. Property management and maintenance also cover general cleaning, preventive maintenance, large-scale projects, landscaping, and the like. If the company does not have an in-house maintenance crew, they usually have a network of trusted and licensed vendors prepared to do the work for them.
10. Legal Compliance
Property management requires a comprehensive understanding of the law. There are many laws that apply to rental properties, such as the federal Fair Housing Act, state-level Fair Housing laws, and landlord-tenant laws. Local building codes and ordinances also exist.
Part of a property management company’s job is to ensure the rental property and, by extension, the landlord remains in compliance with the law. This protects the owner from potential liability.
When a tenant has stopped paying rent or broken the lease, eviction is often necessary. But, eviction is not a simple undertaking. In fact, because of the requirements and procedures involved, a lot of landlords just endure bad tenants. Not with a property management company, though.
A property management company can process evictions for owners. They can prepare all the documents needed as well as provide legal counsel. This property management service, though, usually comes with an extra fee attached.
12. Tax Assistance
Last on this list of property management services is tax assistance. While companies will not do the owner’s taxes for them, they typically provide help for taxes and deductions related to the rental property. This includes supplying a 1099 form. Keep in mind that not all companies offer tax assistance, though.
Find the Best Property Management Services
All things considered, it is clear that hiring a property management company poses plenty of benefits. With all these services included, property owners can rest easy knowing their investment is in good hands.
Are you in need of property management services? Start your search for the best company in your area using Rental Choice’s online directory.
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- Your Guide On How To Evict A Tenant