Property Management - Overview

For landlords, one of the biggest decisions to make is whether they should hire a property management company. Some landlords manage their properties on their own or with the help of a resident manager. However, sometimes landlords need more help that only a property management company can provide.

Property management refers to the process of managing various residential and commercial real estate properties. Typically, landlords hire a property management company if they own numerous rental units and properties. If the landlord lives some distance from their rental property, hiring a property management company can help deal with daily problems that are difficult to handle from afar.

Even if the landlords enjoy hands-on management, they might not have enough time to oversee the property, hence the advantage of hiring a property manager. This way, they can focus on growing their real estate business, searching for new properties to invest in, and overseeing renovations.

While hiring a resident manager is always an option, some property owners don’t necessarily want to become employers. By employing a resident manager, property owners have to handle payroll and other legal requirements and considerations. On the other hand, a property management company is an independent contractor and not an employee.

If the property itself is part of an affordable housing program, it can be complicated and time-consuming to manage. With an affordable housing program, owners typically receive financial aid in the form of a low-interest loan, grant, or tax credits in exchange for renting part or all of the property to tenants who earn below a certain income level. To receive this financial aid, the owners must comply with a very complex set of rules. Because so much is at stake, it can be worth hiring a property management company with expertise and experience navigating affordable housing programs.

To operate as a property manager, an individual must obtain a property management license or a real estate broker’s license, depending on the specific requirements of the state where they live and work. The property management license can be acquired through local authorities, real estate boards, and state governments.

The responsibilities of a property manager depend entirely upon what was stipulated in the contract between the company and the property owner. While some owners may only want the property managers to collect rent, others prefer property managers to oversee all aspects of the property.

To become a good property manager, they must know the state and national landlord-tenant laws. They must also know how to screen tenants, terminate a lease, and evict tenants when necessary. Property managers are responsible for the upkeep of the property. Property managers must promptly respond to and address repair and maintenance requests to ensure safety and habitability. This includes pest extermination, water leaks, and trash removal.

Owners also hire property managers with the stipulation that the latter will market the property to new tenants. This job involves taking photographs of the property and listing it on housing websites. They are also responsible for setting a rental rate for the property by assessing its condition, location, and the current market.

When dealing with a move-out, property managers must assess the property for damage. Depending on the condition, they can determine how much of the tenant’s deposit will be returned. Property managers must also ensure the unit is clean and ready for the next tenant.

If the property has other employees, such as a security guard or an in-house cleaning staff, property managers are responsible for overseeing them. This task also involves hiring, setting salaries, and termination. Overall, the property manager is in charge of supervising the property budget and keeping all records. They organize all the tenant leases, complaints, and repair costs. If the property owner needs help filing taxes, property managers can step in and file the taxes themselves.