Here are a few scenarios to consider. You’re an empty-nester. Your home, once bustling with activity is now empty and eerily quiet as the children who filled the hallways have moved on. Or, you received an inheritance and while thinking about what investment would best serve your needs you find an interesting apartment or townhouse for sale and decide to add it to your investment portfolio. Or maybe you purchased a vacation property in the past, but now with changing circumstances you seldom if ever use it.
In any of the above situations, or a hundred others not outlined here, sound familiar – then perhaps the world of rental property ownership is for you. But did you realize that you do not have to go into this on your own? For many property owners the idea of dealing with tenants, collecting rents, chasing those who fail to pay the rent, looking after maintenance issues and receiving 3:00 AM emergency calls when the toilet backs up is the sort of thought that brings on cold sweats. For those people, especially ones owning more than one rental property, the services of a Property Management company might be the right answer.
But what is a Property Manager? In essence they serve as the go-between separating the property owner from the tenant. While more often thought of as looking after a portfolio of homes and apartments for family usage – a Property Manager could just as easily look after the needs of commercial properties such as storefronts or offices. While often operating as standalone companies, Property Management activities are frequently administered by real estate companies. Realty Executives Mid-Island for example has operated a successful property management division for years.
A Property Manager routinely carried out a number of key functions, including but not limited to the following areas.
Setting Rental Fees: A Property Manager will help set rental rates that effectively attract tenants to the property. Managers have an understanding of the market where the property is located and have looked at comparable properties in the area.
Collecting Rent: In essence a Property Manager is the landlord’s enforcer. They ensure optimal cash flow by setting a date to collect rent each month and strictly enforcing late fees.
Adjusting Rental Fees: The Property Manager can decide to increase the rent charged by a fixed percentage at appropriate intervals, but only if the local market can support such a rental increase.
Tenants: Its basic math – a vacant property does not generate revenue. A key task for a Property Manager is to find tenants for the property. To help do this they will routinely market the property to find tenants, with the goal of keeping the property from standing vacant. They know where to advertise and what to include in their ads. They also understand what attracts tenants, so they can suggest making cosmetic improvements to help makeover the property.
Screening Tenants: Property Managers seek not just any tenant, but the right tenant for the properties they are responsible for. Part of this task involves sorting through prospective tenant applications to find the tenant that is the best fit for the property. They have a consistent screening process, including running credit checks and criminal background checks, which can decrease the chances of being accused of discrimination.
Dealing with Leases: Property Managers can help set the length of the lease and make sure it has all of the necessary provisions to protect the owner. This includes determining the amount of security deposit required.
Handling Complaints/Emergencies: Property Managers are paid by the landlord to deal with property issues such as maintenance requests and tenant noise complaints. They also have the necessary contacts to handle emergency situations.
Tenant Departures: When a tenant moves out, the Manager is responsible for inspecting the unit, checking for damages and determining what portion of the security deposit will be returned to the tenant. After move out, they are responsible for cleaning the unit, repairing any damages and finding a new tenant.
Evictions: When a tenant does not pay rent or otherwise breaches the terms of a lease, the property manager understands the proper way to file and move forward with an eviction. Property Managers are also responsible for the physical management of the property, including regular maintenance and emergency repairs.
Unit Repairs: When some issue arises, or something breaks or wears out (and it will) the Property Manager must attend to it personally or will hire someone to attend to it. They often have a large network of reliable plumbers, electricians, carpenters and other contractors available to handle any task.
The list could go on. A Property Manager (or property management company) is a worthwhile investment, especially if the owner has more than one property to deal with. If you’d like to learn how a Property Manager can make the job of owning a rental property simpler and more enjoyable, contact Realty Executives Mid-Island today and start a conversation. It’s your property, but all of its responsibilities don’t have to rest on your shoulders.