How To Hire A Property Manager? Managing Your Property

Investors are currently saturating buyer’s markets around the nation, focusing on homes in cities with healthy economies. It could be very challenging to manage a rental home you buy in another state properly.

That’s why you’ll need to work with a reliable, dependable property manager who will look after day-to-day upkeep, respond to your tenants’ requirements, and collect rent and other fees on your behalf. If you hire a thief, they might quickly steal your rent, the tenant’s security deposit, and your home’s equipment.

Choose either a local individual contractor or a regional management business to discover the ideal property manager for you.

In This Article

What Is a Property Manager?

Even though they have other occupations and things they need to do, managing rentals daily is something many property owners must accomplish.

A property manager, fortunately, is a real estate specialist who exclusively deals with finding and caring for renters. A property manager can take several actions on behalf of the owner of a particular asset to make owning rental units easier.

Property managers are responsible for managing the overall operation of rentals, ranging from a small number to an entire neighborhood.

This includes overseeing the management of the employees, upkeep and repairs, capital improvements, leasing, money, insurance, property inspections, and tenant relations.

It also includes mailing notices and, in some circumstances, handling eviction and appearing in court.

Should You Hire a Property Manager?

The task may be simple for landlords with one or two rental units, but as their rental portfolios grow, it may become much more difficult for one person to handle everything.

Being a hands-on owner has advantages, and it teaches you a lot about how the company runs, but only some people can scale their rentals on their own.

Real estate is a popular choice among investors seeking passive income. “2 a.m. maintenance calls and worrying about how to create an online advertising campaign for your unoccupied apartments are not passive activities.

Additionally, if you want to grow your portfolio, look for new ones instead of maintaining your properties.

It becomes even more challenging if you try to grow your rental company into new areas currently in demand.

“Expanding to new markets is top of mind if you aim to diversify your portfolio and balance your real estate holdings geographically.

A knowledgeable local property manager can assist you in managing that property from a distance and in, understanding that new market and spotting potential new acquisitions.

Property Management Contracts: What’s Included

A contract that details the obligations and exclusions of the property manager’s responsibilities and salary is necessary when engaging a property manager, just as when hiring any other real estate expert.

You shouldn’t anticipate that property managers will be eager to work exclusively for free rent, even though these costs are frequently flexible.

Being a property manager typically entails extensive duties, including advertising to and screening potential tenants, collecting rent, handling maintenance and evictions, liaising with the neighborhood government, and even monitoring unit upgrades. They are practically always available.

For ongoing management, typical fees can easily vary from 3% to 10% of your monthly rent, but additional expenses can be necessary for particular duties or circumstances.

Before you hand over the reins, be sure that these fees are explicitly stated in their entirety, that you have read your agreement, and that both parties have signed to acknowledge the conditions.

Step 1: Obtain recommendations

Referrals are the most effective way to discover trustworthy property management. Who made the sale of your home? Do they have any recommendations for reputable property managers? Have any of your friends made investments in the same sector?

Next, confirm that the prospective property manager is licensed and has no complaints against them by checking with the state’s Real Estate Commission and the Better Business Bureau.

Interview each candidate after you’ve narrowed down your choices.

Step 2: Keep in mind the first impression

Meet each candidate in person. Is the manager presentable and articulate? Put yourself in the shoes of a potential tenant. Would you like to rent a house from this person?

Step 3: Examine the person’s approach to job postings and advertising

Question these things:

In what publications does the property manager promote open houses?
What kind of signage is placed in front of the building?
Do they run ads in local newspapers, online, or at nearby institutions?
How many positions are vacant for each property manager?
How long does it typically take to place a tenant?
What kinds of openings does the manager of the property have? The manager might not know how to find tenants if, for instance, your condo has two bedrooms, but the manager only manages single-family houses.

Check out the property manager’s website if it exists.

How do you feel about its appearance and features?
Is it simple to locate the rentals list as a potential tenant?
Do you have access to your account and statements online as the owner?

Step 4: Contract terms should be negotiated

Look for the following details in the Owner/Property Manager Agreement as you read it:

Who is your main point of contact, and what are their details? Make sure you have multiple channels of communication open with your property management, including phone and email.
What are the fees for their services? Make that the lease cost and the monthly fee for finding a tenant are recorded. Is the fee comparable to what other managers in the area charge on average? If the fees are too cheap or high, be wary because this can indicate that the management lacks experience or that the deal is too good to be true.
How much notice is needed from the property manager to end the arrangement? It’s critical to have the option to fire your property management within 30 to 60 days if you’re dissatisfied with the work they’ve done. This will give you time to find a new manager.
How are repairs and maintenance handled? For instance, do they outsource repairs and add a percentage fee to the cost? What amount of a retainer is needed by the property manager for urgent repairs? Are you comfortable with them only calling you if the repair costs more than the retainer?
When should you anticipate getting the tenant’s monthly rent? Will you get a check in the mail, or can you choose direct deposit?
Will you or the property manager be in charge of maintaining the security deposit from the tenant?
How will the property manager handle a disobedient tenant? What steps are being taken to evict them? Inquire about the manager’s specific process.

Step 5: Review the tenant leasing agreement with the management

Question these things:

How much of the tenant’s security deposit is required?
What is the monthly rent, and how long (in months or years) are the lease terms? Ask the manager how they arrived at the suggested rent level and for comparable examples. You should also research other websites to determine whether the manager’s rent is comparable to those for nearby rentals. Even though you want a fair price for your house, if the management charges too much, it will remain vacant for a while.
What happens when rent is late? Is the procedure well-written, and will a tenant know the repercussions?
Ensure that the tenant’s obligations are specified in detail. Who is in charge of maintaining the grass, for instance, the owner or the tenant?
What would happen if the lease was broken?
Who should the tenant contact with inquiries? Property managers occasionally have distinct people to contact for lease questions vs. maintenance problems.

Is a Property Manager a Good Investment?

Depending on how you define “empire,” a property manager may or may not be necessary for your rental empire.

It might not make sense for you to spend extra money on hiring someone to handle such tasks if you own a few properties and genuinely enjoy being hands-on with them, from selecting tenants to the occasionally stressful duty of evicting them.

But you’ll need assistance sooner rather than later if you plan to build an empire that spans over a few roofs.

Anyone with more than a few units who don’t want to spend their entire life managing a day-to-day rental business should hire a property manager.

If you have the correct staff, running a rental empire can be a passive source of revenue, but if you insist on doing everything yourself, it can be more like running a dairy farm.

Conclusion

Although it can be challenging to find a property manager, making the extra effort now will help you avoid hours of frustration later. A worry-free investment is what your property manager will give you if you make sure to exercise due diligence.