Hiring a Rental Property Manager

 

Whether or not to hire a property manager/property management company is a decision that many property owners will face at some point throughout their careers in this field. As with any growing business, you may need to bring a more hands-on deck to manage the responsibilities that come with additional properties.

What Responsibilities and Tasks Will a Property Manager Do?

This is an important question to ask in understanding what this hired individual or team can do for you and your business. A property manager is a third-party in charge of handling the day-to-day operations of your real estate properties while both occupied and unoccupied. Many property management services are turnkey operations meaning that they will handle most responsibilities that come with rental properties from marketing to potential tenants to collecting rent. These management services may also cover the following responsibilities:

• Advertise and market the property on rental sites

• Background checks and interviews with potential tenants

• Drawing up of leasing agreements

• Rent collection 

• Managing of maintenance and repairs through a professional service or individual

• Property inspections and check-ins

• Tenant communication and requests

Should I Hire Someone?

A few reasons one might look into hiring a reputable property management company can vary, but oftentimes the scenarios found below are good indicators that it may be time to bring on a helping hand.

How great is the distance between you and your properties?

• Owning property in another state or even another city makes it challenging to check in for maintenance, collection, and general upkeep. The further you live from your rental properties, the more time-consuming, costly and unreasonable your presence becomes. Having a management company in the area of your properties is sometimes crucial to the success of your business and your tenants.

How many properties do you own?

• Responsibilities and time grow with the number of properties you acquire. More units means more tenant requests, more marketing, more maintenance, and so on. If your property portfolio is growing in size, you may see the benefit in lighting your load with the help of a property manager to focus on the day-to-day operations.

How much time do you have?

• If you’re already juggling property management with a full-time job, this can quickly become overwhelming, even for those hwo have years of experience in managing their own properties. Burnout can often lead to details slipping between the cracks resulting in mistakes. It’s okay to ask for help, remember you are running a business and sometimes a growing business requires a second or third set of helping hands.

Are you comfortable communicating with tenants?

• A big part of what makes for a successful and healthy tenant/ landlord relationship is communication. It may not always be easy or comfortable either. Addressing late rent, evictions, complaints, and property damage can be tough and if you are uncomfortable conducting these conversations with tenants, it may be best to hire a property manager who can handle that for you. 

What does your experience look like? 

• Do you have experience in property management and the repairs and maintenance that come with it? Without the experience of being a landlord, it may be in your’s and your tenant's best interest to hire a property manager to avoid any mistakes or miscommunication. When it comes to repairs and maintenance, are you handy, or do you already have services you trust to get the job done? If not, many property management companies are equipped with knowledge and resources for reliable services to take care of those maintenance requests. 

Typical Costs and Fees

Another important question to ask yourself after weighing your options is whether or not you can yet afford to hire a property management company? Potential property management service fees vary with each company, but you will almost always see setup fees, leasing fees, and of course the property management percentage. 

The property management fee can range from 7-10% of rent collected on each property each month. Establishing a new account with a property management company may also result in a Setup fee, so be sure to ask what their rates are before moving forward in the relationship to ensure it fits into your budget. Leasing fees compensate for the cost of marketing, advertising, property showings and phone calls that are associated with leasing a property.

As you evaluate rates, you may want to also research and ask your potential management company about additional fees that may come in in the future:

• Lease renewal fees

• Maintenance fees

• Eviction fees

• Advertising fees

Covering all of your bases and asking all of the right questions is crucial in selecting the right property management company for you and your tenants. Odds are, property investment is one of your largest assets, so you want to hire a reliable individual or company to handle these operations. Here are just a few questions that Utopia Management suggests you ask while interviewing your potential property manager: 

• What does your history with property management look like?

  • How many years in the business?

  • What kind of properties have you managed?

  • How many are you currently managing?

• What kind of services do you offer?

  • Do you have your own in-house maintenance team or a network of reliable and qualified that you can call on for repairs?

  • Do you advertise and market for vacant properties?

  • Do you screen and require background checks on future tenants?

• What does your fee structure look like?

• Do you understand Fair House Laws?

• What do you Look For in a Future Tenant and Applicant?

• Always ask for References!