Property managers are hired to handle the operations, maintenance, and administration of property rentals for an owner. Their work, among many other tasks, includes marketing rentals and finding renters, ensuring rental rates are competitive while covering taxes and overhead, collecting rent, and complying with rental laws.
Their exact responsibilities will vary based on the type of property being managed, the amount they are getting paid, and the terms of the management contract. There are some important roles a property manager can take on to assist rental property owners.
What Is a Property Manager?
Property managers are people that specialize in ensuring a rental is being operated according to the guidance given by the owner—whether the goals be financial or based on providing attractive living conditions, or both.
Guidance can take different forms—corporate property owners may issue mission and vision statements for their properties, while individual owners may give verbal guidance on their goals for the property.
The manager makes sure that responsible tenants occupy the property, payments are received on time, budgets are followed, and the rental is maintained properly.
Owners of multiple rental properties will more than likely need professional help managing property. This is where property managers come in.
How Does Property Management Work?
Property managers handle everything that occurs daily in a rental property. They should have a working knowledge of the real estate industry the rental operates in, such as industrial property or housing.
The property manager then works to ensure that the owner's goals are met by managing rent, tenants, maintenance, budgets, and rental property records. They must also have an in-depth familiarity of state and national laws regarding the legal methods to screen tenants, handle security deposits, terminate leases, conduct evictions, and comply with property safety standards.
For these reasons, some states require property managers to be licensed real estate brokers. If this is the case, a property owner will need to hire a broker to ensure their property is managed legally.
Other states allow for managers to be licensed in property management instead of as realtors, while some don't require licensing at all. In addition to licensing, property managers come with different specialties and experiences.
Setting rent is a basic responsibility of any landlord. Therefore, it is one of the most common jobs a landlord will pass on to a property manager. The property manager sets competitive rent prices to attract tenants to the property. Generally, this is done by conducting a survey of comparable properties in the area—this should also be done at least annually to remain attractive for tenants.
The property manager also sets up a system for collecting rent from tenants. To ensure optimal cash flow, they set a collection date to make sure that property monthly expenses are able to be paid, and strictly enforce late fee policies.
Screening and managing tenants is another core responsibility of a property manager. The property manager may be involved in finding and screening prospective tenants, managing daily complaints and maintenance issues, and handing tenant move-outs and evictions.
Property managers are the people that are normally dealt with by tenants. If you have many properties and tenants, you might need a property management firm.
The property manager must keep the property in safe and habitable condition. Property managers are responsible for the physical management of the property, including regular maintenance and emergency repairs.
Work done by contractors and other repairmen must be inspected to make sure it is up to standards and that they are completing their work in a timely manner.
Managing the Budget
Property managers can be responsible for managing the budget for the building and for maintaining all important records.
The manager must operate within the set budget for the building. In certain emergency situations when the occupants (tenants) or physical structure (investment property) are in danger, they may use their judgment to order repairs or likewise without concern for the budget.
Property managers should be versed in accepted accounting practices to ensure accurate bookkeeping for income, tax, and investment purposes.
Thorough records regarding the property are important for accounting purposes. Records should include all income and expenses; a list of inspections, signed leases, maintenance requests, complaints, records of repairs, costs of repairs, maintenance costs, and a record of rent collection and insurance costs.
Types of Property Managers
Commercial property managers specialize in real-estate used for business purposes. These managers may be well versed in industrial buildings or administrative-type spaces.
Multi-family property managers are accustomed to managing facilities such as apartment complexes. These specialists need to have good customer service skills and the ability to de-escalate situations, as well as perform the usual duties of a property manager.
Single-family home property managers work for real estate investors who hold their investments and rent them out for additional income. These types of investors generally purchase homes in areas where there is a high rate of residential turnover, such as in a military community, where there is a tendency to not purchase homes.
They hire property managers to make sure all of the facets of the property are handled, and that value is maintained while the property is being lived in.
Property managers handle daily operations of rental properties. Their responsibilities are to:
- Set and handle rent
- Market for and screen tenants
- Handle tenant issues
- Schedule and track maintenance
- Manage finances and records