Rental properties are usually managed by either the landlord directly or by a third party property manager. There are positives and negatives to each approach. Learning the key differences can help both landlords and tenants. A landlord can determine if hiring a property manager is the right move, while a tenant can decide if they want to live in a rental that is managed by a landlord or by an outside property manager.
Types of Property Managed
While a landlord or property manager can manage any type of investment property, there are certain property types that are more common to each.
- Single Family Homes- Landlords who own a single family rental property will usually manage the home themselves, as it does not make financial sense to hire an outside manager.
- Small Multi-families- Rental properties with two to six units are often managed by the landlord as well. This number of units still seems manageable to most landlords.
- Larger Multi-families- It is more common to see an outside property manager at larger multifamily buildings, those with six units or more. Due to the number of units, many landlords can justify a property manager’s fee.
- Portfolios of Properties- Property managers can also manage a portfolio of properties for a landlord. This could include any combination of properties, from several single family homes to a mix of multi-familities and commercial spaces.
- Commercial Properties- Property managers are often the ones in charge of daily operations at commercial properties.
- Properties With Absentee Landlords- Any investment property where the landlord does not live in the immediate economic area of the property is more commonly managed by a property manager.
Managing a rental property involves the same responsibilities, regardless of whether the property is managed by the landlord or by a property manager. These responsibilities include:
- Screening Tenants
- Signing Lease Agreements
- Setting Rent Price
- Collecting Rent
- Property Maintenance
- Repair Requests
- Tenant Disputes and Complaints
- Apartment Turnover
- Return of Security Deposit
Point of Contact
One of the main differences between a landlord and property manager is who the tenant will be dealing with on a daily basis.
If the landlord is the one managing the rental, any communication regarding the rental property will be between you and the landlord directly. This has its pros and cons.
Since the landlord owns the property, he or she makes the most money when tenants are happy, pay their rent on time and do not damage the apartment, so they have a vested interest in keeping their tenants happy. On the other hand, the landlord owns the rental property, so they may take complaints personally or may let personal issues get in the way of business.
A property manager is the point of contact between the landlord and tenant. They are often given the authority to make decisions without having to consult the landlord. The benefit of this is that the property manager does not own the property, so they are able to handle situations in a more professional manner. The downside to this is that they do not own the property, so they may not be as attentive about certain issues as the actual landlord would be.
Landlord Tenant Law
Anyone who manages rental property, whether it is the property owner or outside management, has the responsibility of knowing the landlord tenant laws in the state and in the local municipality. The included clauses in the lease agreement, as well as the daily operations of the rental property have to adhere to landlord tenant law.
The types of lease agreements that landlords and property managers use can vary. While the lease agreement can be as general or as specific as you want, the most important thing is that it follows the landlord tenant laws of the area where the rental property is located.
A landlord can use a general lease agreement that they have obtained from a lawyer or other outside source. Often, landlords personalize their lease agreements. They may have specific rules for quiet hours, pet policies or rent collection guidelines.
Property managers often use a general lease agreement for any property that they manage.
Landlords and property managers generally have different ways of dealing with property maintenance and repairs.
When dealing with a landlord, it could take several days to several weeks to get an issue addressed, depending on the severity of it. The landlord will either have to find time to do the repair themselves, or will have to find a handyman or specialist to handle the issue.
Property management companies often have a more streamlined method of dealing with repairs and maintenance. They often have a team of professionals on call who can address these problems quickly.
The rent price you pay may differ depending on if you are renting from a landlord or a property manager.
You may be able to find a cheaper apartment renting directly from a landlord because they are not factoring in the additional cost of paying a property manager.
You may have to pay an application fee when renting a unit from a property manager. The rent may also be slightly higher because the landlord may be accounting for the fee they have to pay the property manager. You may, however, be more likely to find a deal, like a free month’s rent if you sign a yearlong lease.
Should You Hire a Property Manager?
If you are a landlord, debating about whether to hire a property manager, consider the following pros and cons.
Pros of a Property Manager
- Someone Else Dealing With Tenant Issues
- More Free Time
Cons of a Property Manager
- Costs Money
- Turning Over Control of Your Property
Should You Rent From a Landlord or Property Manager?
If you are a tenant, debating about whether to rent from a landlord or property manager, you need to examine several factors. Are you looking for the best price possible? Would you rather deal with the landlord directly or with an outside party? How important are quick maintenance responses and additional services?