If you recently purchased a rental property, you might have been advised to hire a property manager. Property managers handle the maintenance, running, and administration of rental units on behalf of the owner. They are responsible for ensuring a property has tenants, is maintained, is in compliance with rental laws, and that the tenants are paying rent.
Property Management: What Do Property Managers Do? While the exact duties of a property manager will depend on the type of property, there are general roles that every property manager takes on for the owner. This article delves into these roles.
What Is Property Management?
Property management refers to the day-to-day running of a commercial, residential, or industrial property on behalf of the property owner by a third-party professional (property manager). It mainly involves overseeing maintenance, security, and rent payment to ensure the property maintains its value and produces income for the owner. Generally, property managers handle property such as:
- Shopping centers
- Condominium complexes
- Apartment complexes
- Industrial buildings
- Private home communities
What Is a Property Manager?
A property manager is a professional contractor that specializes in property management. They are hired by a property owner to oversee the daily running of a rental unit per the goals and guidance set by the owner verbally or through a mission statement (for corporate property). In a nutshell, a property manager ensures that a property is occupied by responsible tenants who pay rent on time and that the property runs within the budget and is properly maintained.
What Does a Property Manager Do?
A property manager is in charge of the day-to-day management of a rental property, be it commercial or housing real estate. They help the property owner through:
1. Budget Management
Most property owners have a budget within which they must operate to make a profit. Property managers ensure the rental property is maintained within this set budget, except when the property or tenants are in danger. To perform this duty, they must be adept in bookkeeping and accounting practices so they can keep records of the following:
- Signed and active lease agreements
- Property income and expenses
- Inspection dates
- Maintenance requests, complaints, and costs
- Repairs dates and costs
- Rent collection
- Insurance costs.
2. Tenant Screening
Tenants are an integral part of any rental unit; in fact, it is safe to say that such a property would have no reason to exist without tenants. Thorough tenant screening, a property manager ensures not only that a property has tenants but that they are responsible. They also manage the tenants’ stay on the property by handling maintenance, repairs, lease terminations, and evictions.
3. Rent Settlement
Rent settlement refers to setting the rent prices of a rental property to match the competitive rates of the current market. It is one of a property manager’s main jobs and is achieved by comparing properties in the local area through a survey at least once every year. Essentially, rent settlement ensures a property maintains its value while attracting tenants.
4. Rent Collection
Rent is the sole source of income for a rental property owner, making rent collection one of the crucial roles a property manager must undertake. The property manager sets a pay-by date for the tenants and enforces late payment policies. Once they collect rent, they handle the property’s monthly expenses and hand over the net amount to the property owner.
Note: Most property managers get paid a percentage of the gross rent collected, which means it is in their best interest to maintain good cash flow in a rental property.
5. Property Maintenance
Property managers owe the tenants a duty to maintain the rental property within safety standards. This involves handling the physical condition of the property through routine maintenance and emergency repairs. If contractors are called in to repair something on the property, the property manager supervises the work and ensures it is timely and within budget.
Property Management Certifications
One of the crucial tasks carried out by a property manager is to ensure that a property is in incompliance with state and national laws in terms of tenant screening, evictions, safety standards, lease terminations, and security deposit handling. This role is why some states make it a requirement that a property manager be a licensed real estate broker or property manager. Of course, other states don’t require licensing, so you should read up on your local laws.
Types of Property Managers
The three main types of property managers are:
- Single-Family Property Managers – These property managers are hired by property owners who buy real estate in an area with high residential turnover rates and rent it out for income. The property manager must ensure the property maintains its value during the occupation.
- Multi-Family Property Managers – These property managers handle property such as apartment complexes with multiple renters. They must be skilled in diffusing conflicts.
- Commercial Property Managers – These property managers handle property used for business, including administrative buildings and industrial spaces.
Frequently Asked Questions
Do property managers make good money?
The average annual salary for a property manager is $50,740.
How do property managers make money?
Most property managers collect a percentage of the gross rent collected from the property they are managing. Others also charge a monthly flat rate that typically falls at 10 percent of the monthly rent of a single-family home but will vary depending on several factors.
What skills do you need to be a property manager?
Besides an educational background in property management, a property manager should have some working experience and be skilled in communication, customer service, marketing, budget management, and organization.
How do you introduce yourself as a property manager?
If a property owner has just hired you to manage their property, you can introduce yourself to the renters through a formal letter with a company logo. Your letter should include your contact information and details about making maintenance requests and paying rent.
Property Management: What Do Property Managers Do? Generally, property managers oversee the operations, administration, and management of rental units. They ensure rent rates are competitive, screen and accept tenants, manage the day-to-day maintenance of the property, collect rent, and manage the financial records. A property manager will also ensure a property complies with the state’s rental laws where it is located.