If you own an income-producing property, you’ll likely want to increase your earnings without hurting the property too much. Getting suitable new tenants and keeping the property running and in good condition can help you earn more profits over an extended period.
However, if you have a job that requires you to work round the clock, you don’t want to spend your free time or residual energy managing the property yourself; one of the numerous reasons to hire a skilled property management company to protect your interests.
Still unsure if you want to relinquish part of your rental income to a third-party contractor? In this article, we’ll discuss everything you need to know about property managers and how a property management company can help you increase your return on investment.
Difference Between a Property Owner and a Property Manager
The only similarity between a building owner and a property manager is that they’re both responsible for managing properties, and the person who owns the leased property is the homeowner. The term “property manager” usually refers to a licensed personnel who manages the affairs of multiple property owners rather than one.
Rental management companies treat their clients as advisors, keeping them up-to-date about rent payments, necessary repairs, maintenance issues, and other problems in real property.
Property owners and property managers both deal with clients but to different degrees. Landlords are property owners who hire professionals to manage properties and carry out the daily operations of their properties. Property managers represent many landlords and work jointly with tenants in each unit.
Property managers definition; this refers to a third-party person employed by the owner to carry out the property’s day-to-day operations. Property managers are professionals with a real estate broker’s license to manage investment properties. They are generally considered knowledgeable and competent in the real estate industry.
Over the years, real estate owners have faced many challenges in managing property. Dealing with tenant complaints while balancing these properties’ day-to-day activities and maintenance takes work, so most property owners hire a professional property manager to manage their real estate. Property owners don’t have to worry about handling and management this way.
How to Find a Suitable Property Manager
Here are four steps to take when looking for a good property manager
Set Your Selection Standard
Finding the perfect property manager begins with comprehending your peculiar criteria and needs. Do you want to opt-in for the most budget-friendly choice and want to be part of the process? Do you need a property manager who will make you completely forget about your real estate asset? Do you need someone who uses property management software to solve problems or does things the ancient way? These are questions you need to ask yourself before you begin your search.
Look For Several Property Managers
When you’re searching for a property manager, you should imagine the situation of an employer searching for other employees because the professional relationship between you and your property manager will be identical.
You can also put yourself in the shoes of prospective tenants and peruse online listings to see which property manager in your environment would do a great job managing your property.
Interview the Candidate
You need to develop challenging questions for your interview that will test the property manager’s knowledge and management skills and show that you are conversant with recent advancements and won’t be easily taken advantage of.
Once you have completed the interview, it is time to decide. Once you tell the successful candidate that you are willing to accept them, they should have a smooth induction process where you’ll sign a contract.
Make Sure You Made the Right Decision
Just be sure to investigate and do routine evaluations to ensure they fit you perfectly. If you’re regularly forcing them to work or tenants contact you frequently, this may be a sign that they aren’t providing the agreed property management services. If so, you should let them go so you can save money.
What Is a Property Management Company
Property management definition refers to a company that manages real estate properties on behalf of the homeowner, usually with little participation from the landlord. A property manager is an experienced personnel with a property management license who usually supervises a larger group of properties.
Residential property management duties and responsibilities include:
- Rent collection
- Tenant screening process
- Filling vacant units
- Setting competitive rental rates
- Carrying out repairs and maintenance
- Property management
- Affirming all national landlord-tenant laws and tenant regulations administered by each state
Given how complicated and tedious managing rental properties can be, rental property owners often seek the services of a property management company to oversee the daily operations of their property assets and respond to any concerns or inquiries renters might have.
Types of Property Management
Because properties vary in size and category, there are several different types of property management to meet the wants of each particular property.
1. Residential Property Management
Residential property management companies often control multiple rental properties. Real estate brokers who work for this type of management company deal with renters who live in a space. However, residential properties are not limited to only apartments; they include single-family homes, gated communities, vacation homes, and condos.
2. Commercial Property Management
Commercial property management companies manage several non-residential properties, usually associated with commercial establishments looking for premises to rent. While large offices and individual offices make up the majority of commercial spaces, retail properties, hotels, and co-working spaces are also considered commercial real estate.
3. Industrial Property Management
Industrial property management is unique because you must follow stringent building codes. Since most industrial real estate is associated with manufacturing and production, you must adhere to local government laws and regulations to ensure an exceptional return on your investment. Products worth thousands or millions of dollars can be destroyed within minutes if only a few building laws are violated.
4. Special Purpose Property Management
Special-purpose properties require management but do not fall into any of the above categories! Typically, a special-purpose property can’t be converted for alternative uses. Therefore, most special-purpose real estate assets can only be advertised or used for their authentic purpose. For instance, converting a soccer field into a shopping center takes work.
How Property Management Companies Improve Your ROI
If there’s one thing most landlords agree on, they want more value for their money by reducing costs. The theoretical way to do this is to hire an organization specializing in property management. Collaborating with a property management company can boost your return on investment (ROI) and save energy and time.
Property management firms are intermediated between bellyaching renters and over-extended property owners; this stops you from getting directly involved and affecting an excellent real estate investment deal. You must choose what to spend time on as a real estate investor.
Finding other investment properties, building your career, or relaxing with your loved ones may be more important than personally handling rental properties. In any event, that’s what’s obtainable when you use the services of a suitable management company.
Here are some of the ways a skilled property management company can increase your return on investment:
Finding Suitable Tenants
Property management firms are experienced in advertising properties and selecting suitable tenants. Property management companies can help you prevent evictions and overdue rent money by screening tenants for background and ability to pay. Frankly, most real estate management companies have a list of renters looking for properties like yours.
Determine the Appropriate Rental Rates
Before purchasing your investment property, you might have already explored rental rates in the neighborhood. Nevertheless, property management companies have views on how much renters are ready to pay. Property managers strike a balance between optimizing your monthly rent and setting competitive rental rates so you can fill vacant units.
The management company also collects rent and deposits it into your account as a bonus. These companies often have access to online property management software that makes collecting rent flexible, and they can even have rent money directly deposited into your bank account.
Marketing and Advertising
Property management companies know how to find the right places to advertise your property. They create fascinating property depictions and take photos that display your property in the best possible light. They will ensure that suitable tenants see your single-family home, townhouse, or flat at the appropriate time.
Vendor management doesn’t apply to every property owner. Nevertheless, a management company can be a point of contact for service persons, dealers, and contractors if you own a big commercial building. Outsourcing this task to property managers will help you save money. Property managers will work daily to find the best rate for each task. As a landlord, you might not have time for that.
Knowledge of the Law
You may have done comprehensive research on all tenant laws and regulations that relate to rental properties. Nevertheless, property managers have hands-on experience handling multiple properties with peculiar needs.
Property managers are aware of the state and federal laws that apply to being a property owner. They also know the tenant’s responsibilities, such as timely rent payments and following the rules mapped out in the lease agreement.
This makes your management company a priceless resource for any legal matters relating to your rental property.
Real estate investing is a critical business, and you must ensure that your real estate investment brings the desired results. A property management company will help you maintain the property, deal with renters, and manage your finances.
Are you ready to maximize your real estate investment returns? Homes by Ardor is a real estate company that can help you throughout your journey to becoming a seasoned real estate investor. Contact us to fix an appointment!
Frequently Asked Property Management Questions
What Does Property Management Mean?
To properly understand property management, you need to put yourself in the position of a homeowner who is trying to maximize earnings without going through the troubles of tenant screening, collecting rent, dealing with potential clients and leases, and much more. It’s an awesome way to be a real estate investor with a hands-off approach.
What Is a Property Management Company Definition?
A property management company is an organization whose primary focus is to manage rental properties and receive regular rental payments from renters or occupants of a residential unit; this organization is also responsible for maintaining the real estate property.
How Long Does It Take to Rent My Property?
On average, it takes 1-2 months to rent out real estate, depending on the following factors: condition, time of year, location, and rent price. These factors will greatly affect how long your rental property stays vacant, and you control two of them. A clean, well-maintained, renovated property and affordable rental rate will help you rent it out quicker.
How Much Does a Property Manager Cost?
Property managers typically charge $70 to $260 monthly to manage properties. However, take this with a pinch of salt. Many property managers use a fee based on a percentage of the rent, making it challenging to determine an average rate.
However, it should be a maximum of a few hundred dollars a month. Again, this relies on the size of your property and its location. The monthly property management fee doesn’t tell you the whole story.
Property managers charge you for additional property management services such as scheduled inspections, maintenance, and annual statement submissions. In contrast, others use their monthly fees, meaning you will spend more annually than 12 times the monthly property management fee.
The annual fee will rely on the kind of fee agreement the property manager utilizes; this is specified in the property management agreement. Proprietary management fees are usually paid as a percentage or flat fee.
What Is Real Estate Property Management Definition?
Real estate property management is used for any rental property, including commercial or residential property. A management company helps carry out the day-to-day operations of a real estate property or group of properties on behalf of the owner. Property managers supervise maintenance issues and operations and coordinate the purchase and sale of a property with real estate agents.
Kris Reid is the CEO of Ardor SEO, a company that helps real estate professionals get more leads and customers to predictably grow their business.
Over the years, Kris acquired extensive knowledge of SEO and its practical applications in various industries, with the main focus on real estate.
In 2021 Ardor launched the Icons of Real Estate Podcast to share proven strategies from the top producing icon agents with the real estate community.
After obtaining the real estate license in 2022, Kris joined eXp Realty and launched Homes by Ardor, the platform that was built to be the fastest way to buy or sell a house. Homes by Ardor also provides leads for its partner companies and realtors.