Do you need a designated person to manage your property? This can be a tough decision to make if you’re unsure of the pros and cons of a property management company. Property managers are invaluable assets for property investors. However, they can also be extremely detrimental if they are not doing their job correctly.
What Does a Property Manager Do?
Someone that is in charge of the property management needs to have the skills of a business and a real estate manager. Managing a property means that you will be contributing to the life cycle of the property, involving yourself in every aspect of it whether it is residential, industrial, or commercial.
Here are some of the responsibilities of a property manager:
- Handling ownership transfer paperwork
- Maintenance booking
- Management of the money circulation
- Daily activities on the property
While property managers don’t necessarily maintain the grounds, they do at least handle the contracts for hiring cleaning and landscaping services that do. Here is nice property management resource to learn more.
Do You Need a Property Manager?
While hiring a property manager isn’t necessary for every single property owner, it can be incredibly helpful, especially if you do not live near your property(ies) or if you have another main business or job you need to attend to outside of your investment properties.
However, you should keep in mind that hiring a poor manager could be the demise of your investment. The field of property management is expected to grow around 10% from 2016 to 2026, which is well above the typical average for other fields. This potentially reflects that there will be a rush to join a promising field by those who are less than qualified. Therefore, extra caution should be used as you interview and consider a property manager.
Here are a couple instances where a property manager could be helpful to your business:
- If you live far away from the property that needs to be managed
This is due to the fact that the closer you live to your property, the easier it is to manage. If you live near your property, it is much easier to handle tenant complaints and respond to maintenance issues and collect rent in a timely manner yourself.
However, if you have to commute to your property then the costs of the commute itself can really add up.
- If you are inexperienced in property management
You can invest in real estate without any actual knowledge or experience in property management – just hire a property management company. Property management companies help you save money and run your business more smoothly. For example, they will ensure that the proper repairman is hired instead of someone who takes forever and eats into your time and money.
Inexperience in property management can also lead to misunderstandings regarding the Fair Housing laws, which could lead to you being blamed for discrimination or accused of being a slum lord. Any of these things could ruin your investment, but that’s where an experienced property management company comes in.
How to Hire the Best Property Manager
While not all property managers are the best at their job, it is possible to find someone who is good at it all around.
The first step to hiring a good property manager is to check to see if they have the proper education and training to fill that position. Onsite property managers should have at least some real estate experience as well as a basic understanding of the construction of buildings.
While specific education isn’t necessarily required for the job, having some type of degree in the field is extremely helpful (such as a bachelor’s or master’s degree in business administration or a real estate).
If you’re interviewing a property manager, you should make sure that you are asking the right questions to learn as much as you can about their experience and education. You should ask about their knowledge of federal, state, and local law, as well as how their methods for keeping tenants and filling vacancies.
A quality property manager or property management company will have a solid property management business plan. This can consist of their short term and long-term goals, their plans for maintaining properties, and they should be up to date on all of the local laws that may be in the process of getting certified. Knowing how to find clients is important as well. For more information, check out this article on how to develop a property management business plan.
Important Aspects of a Property Management Business Plan
There are base services that a property manager offers as well as more in depth additional services. The base level services consist of:
- Collecting rent
- Inspecting the property regularly
- Ongoing maintenance
- Regular repairs
- Marketing the property
- Evaluating the property
- Screening potential and current tenants
While these are all very important services, a little more can go a long way.
Creativity is important in any industry, including property management. Going above and beyond in this field can include things as simple as an incredibly specific set schedule for maintenance, such as specified reminders set in place to prevent the possibility of missed deadlines. Things like annual maintenance only come around once a year and can be difficult to remember.
A property manager could also dedicate themselves to learning as much as they can about different asset classes of real estate in order to learn more about the sub-classes. This applies to both commercial and residential properties.
The Benefit of Property Management
Between local laws, federal laws, specific tenant concerns, and irregular maintenance issues, there is a lot of factors going on in property management. Hiring a property management company can significantly reduce the rental headaches. While property management isn’t for everyone, if you are interested in starting a property management company or hiring one, it can be well worth it.
Many benefits of utilizing a property management company are directly related to saving you money on your investment, but it also takes a lot of personal stress off of you. Hiring a trusted property management company gives you the freedom to focus your valuable time on other aspects of your investment.
Feel free to contact Dona to get a perspective on property management companies when you’re seeking to buy property!