What Makes an Ideal Property Manager? [with Infographic]


January 3, 2019

In short, a property manager takes over the entire rental process end-to-end. Property managers help landlords from the moment that a unit is about to become vacant and they assist with finding a tenant, servicing the apartment and collecting rent. Between these steps, a good property manager will bring in a top-rate professional photographer for the listing, coordinate the open houses, perform background checks on interested tenants, and bring in and arrange for home improvement contractors. They also take care of monthly rent collection, weekly maintenance issues, and tenant communications after the tenant has moved in. In short, a property manager manages the entire rental process from start to finish, leaving property owners and landlords with a truly passive source of income on their investment property.

 

1) Rent

Your property manager’s involvement with rent is threefold:

  • Setting the optimal monthly rent: A good property manager should understand the market. They should know how to price your unit based on your unit, your area, the current market conditions, and tenant budgets.
  • Rent collection: Property managers have the backing of property management companies to ensure that you are paid on time. This begins with your property manager setting your rent collection guidelines in the lease, followed by approaching tenants who are late with their monthly rent. Many property owners struggle with these rent collection issues, which is why they choose to outsource it to an agency.
  • Rate adjustment: Pricing the apartment is an important first step. A good property manager should appraise your property’s yearly rental value according to a thorough understanding of the market conditions.. They should know exactly how much you can legally raise your rent and advise you on how early to start factoring a rent increase.

 

2) Tenant relationship

A good property manager navigates complicated issues with tenants and effectively mediates on your behalf. Beyond conflict resolution and representation, your property manager also takes care of:

  • Finding a tenant: Landlords will hire a property manager to tap into their network of tenants, and real estate agents in addition to their rental marketing know-how. Good property managers will be experienced enough to secure tenants even without properties being publicly listed.
  • Background and credit checks: Not only does a property manager know which documents to ask for during a tenant screening, but they can also carefully evaluate all the criteria to select ideal tenants.
  • Evictions: Evictions can range from awkward to downright nightmarish. Property owners rely on good property managers to deal with evictions swiftly, smoothly and effectively.

 

3) Maintenance

Property maintenance involves scheduled upkeep and on-the-spot repairs that come up from time to time. Handing over your apartment to a property manager should be a ‘value-add’ in terms of a better-maintained property, as well as freeing up your time from tedious repair requests. Any landlord who has had to answer late night emergency calls knows that having someone else in their place to address the problem is worth the extra expense.

Blueground property manager helps with painting and repairs

  • General maintenance: Regular, scheduled maintenance varies depending on your type of Rental. For a short-term rental that may be regular trash removal, cleaning, refreshing bath amenities and the like. For longer-term rentals that may include fire escape checks, weather-related maintenance like heating, AC, etc.
  • Upgrades and repairs: From exterminations to leaky pipes, landlords have to deal with upgrades and repairs in a timely manner. To avoid angering your tenants and damaging your property further, emergency repairs need to be dealt with immediately. As your rental property portfolio grows, a property manager can take over these responsibilities while leveraging their own directory of trusted plumbers, electricians, and appliance specialists.

 

4) Legal issues and paperwork

An experienced property manager has seen their fair share of leases and agreements. A larger property management company may even have their own legal department that is competent in local and state rental law. By hiring outside help, you will have a professional who knows how to write an ironclad lease, deal with tenant evictions and keep you on the right side of the law.

  • The lease: Your property manager should have a foolproof lease template in place and should be knowledgeable as to which modifications and appendices should be included.
  • Reducing landlord liability: Smoke detectors, fire escapes, which days to turn on the AC — a property manager will keep landlords free of complaints while ensuring the comfort and safety of their tenants.
  • Tenant vacating checklist: A tenant move-out is a busy time for all parties involved. By bringing in a property manager, they will go through the tenant vacating checklist on your behalf and evaluate any damage done during the length of the lease. They can let you know how much of the security deposit can be returned and note any repairs that need to be done before the next tenant arrives.

 

5) Tax

An informed property manager can advise you on your property tax and income tax questions. At the end of the fiscal year, you’ll have all the documents needed for your accountant. In some cases, they may even file your taxes on your behalf.

What does a property manager do Infographic

 

What is the landlord left to do?

A landlord, landlady or property owner are all obligated to provide a safe and clean living space, but once a property manager comes into the picture, some of those small tasks are effectively outsourced. The landlord is still the legal owner of the apartment unit and has the final say when setting monthly rent, occupancy rules, security deposits and the like. They will also still be implicated in any issues between the apartment and the entire apartment building.

 

Are a property manager’s services worth my while?

While many see renting out a home as a source of passive income, the time and energy spent on a weekly basis amounts to more than a part-time job. Apartment rentals require a large allocation of time when sourcing tenants (and for apartments in student areas, this process can be twice a year) on top of week-by-week maintenance. In the longer term, units require upgrades as well, whether that be new furnishings, appliances, or a complete renovation.

Questions to ask yourself when debating between handling a rental yourself, and handing it off to a property manager are:

    • Do I have the time every week and throughout the year?
    • Do I have better professional skills and industry contacts than a property manager would?
    • Does managing my property directly fulfill me or bring me more peace of mind?

 

How to pair up with an ideal property manager

Every property manager-landlord relationship is different. When soliciting a new property management company in Dubai, use the following points to guide the conversation and your research.

Experience

Holistically, a property manager’s experience level should match your needs. If you are looking to hand over a portfolio of twenty properties spread across your city, look into a property management company with industry contacts and years of know-how. If it is a boutique operation, perhaps a young property manager in the early stages of their career will have the energy and patience to provide individual care to you and your tenants. For new Dubai residents, a local property manager will know their Trakheesi from their Ejari and their freeholds from their leaseholds.

But beware of rookies jumping over low barriers to enter the profession. Asking questions like how many years of experience, the types of apartments they manage and in which kinds of buildings they operate will give you a better impression of the property manager. When in doubt, client testimonials and references should be made available.

Maintenance

The ideal property manager is a maintenance expert. They should be able to handle ad-hoc repairs promptly and effectively, while also doing scheduled maintenance to prevent any bigger expenditures down the road. A property manager with strong local contacts will know exactly who to hire to replace the locks on a Friday and who to call when a clogged tub needs draining.

The property manager (or their company) should have a clear checklist of seasonal, annual and between-renter checks and repairs from air filter changes to a damage report. They should also handle cleaning services so your property and its common areas continue to look their best.

Rent Collection

Property managers have a clearly defined process for collecting rent that makes sense for the landlord and for their tenants. The lease should explain when (frequency, recurring date) and how to receive rent (post-dated checks, online bank transfer). It is also worth asking what their course of action would be, on your behalf, when a tenant doesn’t make rent on time.

Property Marketing

The ideal property manager has all the property marketing know-how from how to stage a home and which photo angles best open up the space, to which listing titles trigger more inquiries. Furthermore, they know which marketing channels your dream tenant visits when apartment hunting (classifieds over Facebook groups, perhaps).

An informed property manager also has creative strategies to fill vacant apartments between renters. Property managers may have connections with relocation specialists, film production companies or short-term vacation rental specialists who can provide an alternate source of rental income. A property manager can also offer value-added services like signing a lease online.

Tenant Type

Property managers can also act as matchmakers. The ideal property management company has a database of high-quality tenants and connections to real estate agents who can efficiently filter the best tenants for your property.

Blueground property manager seated with couple tenant and landlord

Property managers may ask you what your perfect tenant resembles in terms of length of lease, employment profile or income, any aversion to pets, etc. Once they start sourcing potential tenants, they ought to have a complete tenant screening procedure in place. A tenant background check should include a credit check, landlord reference, and employment reference, as a minimum. You can free yourself of this procedure with a good property manager who efficiently moves through screening and signing a tenant.

Rental Value

Property owners could be underselling or undervaluing their apartments. A knowledgeable property manager should know the going rate for your property and how to price it competitively. They should be able to strike a balance between what maximizes your return while minimizing the time on the rental market. As a landlord, you can ask your property management company how they would calculate the monthly rent for your apartment and what they would expect as a commission or annual fee.

Property owners, whether they work with a property manager or not, should review their monthly rent on an annual basis. The rent should be reviewed regularly to follow market trends, inflation, and competition. A good property manager knows off the top of their head what the legal limitations are when it comes to a rent increase and how to ask existing tenants for their approval.

Your rental’s value on the market is also a factor to consider when considering renting to a long term tenant vs services like Airbnb or renting through Blueground.

Vacancy Rate

Every landlord dreams of a near-zero vacancy rate and, in theory, a property manager should be able to help you achieve this. Before signing with a property manager, inquire about the actual vacancy rates for their current rentals. You can also ask for the average number of days it takes for them to fill a vacant apartment.

As a real estate tech company, Blueground effectively offers a 100% occupancy rate for the length of their partnership with landlords. As the primary tenant of your apartment unit, Blueground takes care of all property management duties while subletting the furnished apartment to senior executives and other high-earning tenants. Rather than a guaranteed occupancy rate, Blueground promises its landlords and property owners a steady monthly income.

Communication Style

Luckily, this one you can feel out from the beginning. The way the property manager communicates with you is a good indication of how they will handle your tenants. Keep a close eye on how they persuade you, how they listen to your inquiries, the punctuality of their replies and their follow-through with requests.

Landlords should not overlook their property manager’s communication style and demeanor. To your future tenants, this person or agency will be your public face. You can test this out before signing with a property management company by seeing how proactive they are with your demands, and how often they speak with you.

Upgrades

No property, market, or target tenant is the same — and as such, an ideal property manager should be able to point out which upgrades are best suited to raise the value of your unit. First, the property manager should know whether it is worth your while to lease out the apartment as an unfurnished unit, furnished with basic appliances or fully-furnished. While an apartment with complete decor and amenities requires a large initial investment, depending on the average furnished apartment rent in your area, you may get your investment back in less than two years.

Landlord Resources Ideal property manager infographic

No property, market, or target tenant is the same — and as such, an ideal property manager should be able to point out which upgrades are best suited to raise the value of your unit. First, the property manager should know whether it is worth your while to lease out the apartment as an unfurnished unit, furnished with basic appliances or fully-furnished. While an apartment with complete decor and amenities requires a large initial investment, depending on the average furnished apartment rent in your area, you may get your investment back in less than two years.

Companies, like Blueground, specialize in appraising and outfitting apartments in Dubai with comfortable and eye-catching furniture, linens and electronics. The result is move-in ready turnkey homes that appeal to a corporate housing audience and renters willing to pay a premium for a luxury apartment.

Evictions

Should it come down to an eviction, how will your property manager handle a difficult tenant? A seasoned property management company is aware of the local laws governing evictions. As such, they will know their boundaries and your rights as a landlord. You can request to see their standard lease agreements ahead of time to see what their eviction process resembles. The contract should spell out the steps taken for overdue payments and conditions for breaking the lease.

If a property manager delivers on all of these strengths, it could be worth your while to partner up with them for one or more of your apartments. Smart landlords will calculate the incremental weekly time savings, the reduction in time between renters and perhaps a marginal increase in monthly rent.


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