Your 101 Guide to Property Management

property management

By definition, property management companies and property managers are experts with duties like filtering tenants, managing properties, marketing rental homes, collecting rents from tenants and creating sensible budgets. Landlords who have limited time for managing their properties need a property manager. Landlords can delegate redundant tasks to the property management company. This way the property manager will have time to engage in other productive activities.

When you delegate tasks to a property manager, you will be left with roles like “supervising”. All that you should do is ensure that the property management company is accomplishing their duties perfectly.


Understanding the Roles of a Property Manager

A lot of landlords wonder if they should hire a property manager or not. Well, this is a smart question to raise. To decide if you need a property manager or not, you must be clear about their responsibilities and duties.

For example, do you want a property manager who can help you find tenants? Or, do you want someone who can help you with maintenance? The roles and responsibilities of the property manager should be discussed before you sign the agreement.

The first step in hiring a property management company would be deciding between an employee and a contractor. There are many benefits and drawbacks of hiring an employee or a contractor. You must consult a tax specialist to decide on the right and favorable option. In some cases, you will face certain obligations (like fetching the Federal Tax Number). Additionally, you must focus on the compensation of the property management company. Will you pay them every hour, day or a fixed salary?

On the other hand, when you hire a property management company you should ensure that everything is documented in a contract. All aspects of the properties and your relationship with the property manager must be written in the contract. Property management companies are expensive. But, if you have multiple properties to be managed, and if you have limited time, you should hire a property management company.


Picking the right Property Management Company

Choosing the right property manager or management company is not simple. It is a daunting task with so many options to choose from. Always choose professionals who have an active and an authorized real estate license. Licensing requirements differ from one state to another. That is why you should ensure that the property management company meets local licensing requirements.

Next, you should choose a professional who is experienced in leasing, tenant relations, advertising, budgeting, marketing and property maintenance. An ideal property manager will be aware of state and local regulations too.

Top Tip: Landlords will be accountable for all activities performed by the property manager. For example, landlords will be sued if the property manager violates a state or local housing law.

Even if you feel like the property management company is a perfect fit, you should initiate an interview. During the interview, ask questions on the property manager’s experience and qualification. Here are few questions you must ask:

  1. Are you really interested in handling my properties?
  2. Do you have experience with rents?
  3. Do you have experience with management and maintenance of rental properties?
  4. Have you ever encountered problems with landlords?

Finally, ask if the property manager has queries for you.


After Finding Your Property Manager

A lot of people stop when they find an ideal company or person. But, this is a bad move. Even after spotting an ideal candidate, you should inquire in the following areas:

  1. Talk to landlords who have hired the property manager or management company. Ask about the property manager’s strengths, roles, and weaknesses.
  2. Never skip background checks and credit history reports. The property management company will be responsible for rents, deposits and maintenance charges. They will handle your property’s monetary aspects. It is important to hire someone who is good and honest with finances. Hire a reputed company to perform a background check on the property manager. Also, obtain a written consent from the property manager before verifying.
  3. The property manager should not have any DUI cases or criminal records. This is as important as the credit report. Would you ask a criminal to handle your properties? Certainly not! As a part of the verification process, inspect the property manager’s driving and criminal records.


The Verdict

Always remember that property management companies are professionals with fixed roles, duties and compensation. To play safe, you must be clear with the termination clause too! This way you can avoid unexpected conflicts.