Owning a real estate investment property is no walk in the park. One of the biggest business decisions will be whether or not to hire a property manager. Are you currently handling all the paperwork and tenant communication? Then you know how much work goes into managing a rental property. Bringing in professionals who can handle everything from finding a tenant, maintenance management, and legal paperwork may sound like a dream come true.
So, what does a property manager do? Is it the same as a real estate agent?
First and foremost the company acts on your behalf directly with prospective tenants. Meaning, you don’t have to deal with daunting tasks. For example, sifting through hundreds of applicants and communication with tenants on a daily basis. They collect rent, manage the rates from year to year, handle maintenance and renovation projects, liaise with tenants about issues in the building, and even handle legal issues. They deal with properties like yours all over the city.
Property management 101
Your property manager is responsible for three major tasks concerning the rent:
- Setting the price: Your PM will understand the market. They will make sure to set the correct price for your apartment according to the market and ensure that you are not sitting on a vacant apartment.
- Rent collection: An individual knocking on a door is less intimidating than a company setting strict rules and sending paperwork. Your investment property is a business and the property manager is there to make sure you get your money! Blueground makes sure the rent is paid on time every month. We work with large multinational companies, who trust us to take care of their executives. Our partnerships ensure payment and professionalism.
- Rate adjustment: After the price is set and the rent is collected, the work of a property manager is not over. They will be responsible for monitoring the market value of your property over time. Also, how the rent should increase from year to year. Their goal is to get the most for your property. Make sure they are adjusting the rent and evaluating the trends on a regular basis.
2) Tenant relationship
What does a property manager do when a tenant turns into a nightmare? They handle it. Landlords and tenants are notorious for developing bad blood. It’s a tricky relationship to manage. As the landlord, you see a two-party business contract. The tenant, however, sees you as the boss of their house. A property manager can eliminate this. They have an official presence which sets clear boundaries.
Communication isn’t the only benefit of property management representation. They also take care of the following tenant responsibilities:
- Finding a tenant: The number one reason many landlords turn to property management is to find a tenant. A PM knows which ad outlets will gain the attention of tenants that match your profile. They will offer expertise on how to make your property more attractive to the kind of tenant you are looking for.
- Background and credit checks: A property manager will have better resources and data, helping them to make an educated decision about each prospective tenant.
Maintaining a pleasant tenant relationship is key
Tenant safety and protecting your property are top priorities for the property manager. You have invested time and money to provide a great space. It’s your responsibility to make sure the amenities are working and that the tenant is safe. What does a property manager do in case of an emergency at the residence? They will be the first to handle anything regarding the physical property and handle paperwork thereafter.
- General maintenance: Certain maintenance services are standard. This includes regular trash removal, extermination, leaks, fire escape checks, weather-related maintenance like heating, AC, snow shoveling etc.
- Upgrades and repairs: When repairs are needed, time is of the essence. You don’t want to cause your tenant damages or inconvenience that will lead to a lease dispute. Your PM will make sure that any issues are taken care of right away. They probably have a go-to list of trusted maintenance and repair professionals. This is including but not limited to plumbers, painters, electricians, mechanics, appliance servicemen, etc.
4) Legal issues and policy
Outside of handling the movement of money and tenant communication, the next aspect is the legal department.
Property management firms have seen hundreds of leases and agreements. Their legal department will be highly knowledgeable about state standards in multiple areas. For example, regarding the safety of the apartment, the rights of the tenant and many other details you may have overlooked working solo as an owner. Their legal team will be looking out for you as their client so that your rights as the landlord are protected. Especially when dealing with evictions or tenants who have caused damage beyond the coverage of the security deposit. This is a key element because in New York many laws favor the tenant. Regardless of how many years of experience you have as a landlord, nothing beats a great legal team.
- The lease: The property management team should go over your lease with a fine-toothed comb. From the expectations of both parties, the security deposit and timeliness of rent and reporting maintenance issues.
- Tenant inquiries and complaints: Speaking of issues, the property manager should be the first point of contact. The tenant can report issues concerning maintenance, rowdy neighbors and other nuisances and emergencies. That is, so you don’t have to answer a 2 AM call from a tenant who forgets how to turn the AC on.
- Tenant vacating checklist: The move out process is riddled with paperwork. The PM will have their own thorough tenant vacating checklist that covers damages. It will also determine what portion of the security deposit is owed back to the tenant.
The PM will advise on how you should file your income tax from the property. They will also provide the necessary paperwork for your accountant. Depending on the property manager, they may even file your taxes for you.
With a property manager, filing your taxes will be a breeze