What Is The Role Of A Property Management Company?
If you managed your own rental property, you might not be completely sure what the property management company is doing. Sure, they 're going to take over managing your property, but what does that include? What are the processes?
The point of hiring a property management company is to free up your time while you feel confident that your manager will take good care of your property. Most handle everything from selection of tenants to maintenance repairs so you don't have to.
Before you hire a property management company, you should know what tasks they perform and how they handle such things as rent collection and tenant disputes. In this article, we 're going to tell you what the core responsibilities of the property manager are and how they operate.
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Marketing and Leasing
When you hire a management company for the first time, they should make an initial home video that includes a recommendation on what to repair and update. These recommendations are made to improve your home so as to attract better tenants and reduce your chances of long vacancies. They may also include the necessary repairs to bring home to a ready-made move and comply with any regulations, such as required smoke alarms or door locks.
The property manager will be in charge of marketing your home. This includes photos , videos, website postings and displays. It's their job to market effectively so that your home can rent quickly and easily.
Examples of the types of photos they take on their website and/or on the Google page should be provided. The photos should show each room and have adequate lighting. You want the photos to show all the space in your home and to highlight its desirable features.
Property management companies should be qualified to set up a proper rent for the area where your home is located. Good companies will perform a rental analysis that breaks down what your home should rent for and why. Some companies, including Good Life, have this tool on their websites.
They will post your home listing on their website as well as popular listing sites such as Zillow, Craigslist, and Trulia. Once your home is posted and the applicants are received, they will be responsible for selecting the tenant and drawing up the lease.
Rent Collection and Accounting
They 're also collecting rent from tenants. For this role, some companies will have a specified property accountant. They will be responsible for ensuring that everyone has paid and enforces late fees for those who do not.
If the tenant refuses or neglects to pay the rent, the company will be responsible for starting the eviction process. They are likely to have a lawyer who will assist them in this process, although most homeowners are responsible for legal fees.
Once the rent has been paid, they will deduct the portion of the rent that goes to them (management fees) and other miscellaneous charges (such as repairs that occurred during the month). Then they're going to pay you the rest. Most of the companies include a deposit statement that sets out any expenses incurred during that month.
Be sure to clarify whether the company is accounting for a full month or a mid-month period. This will affect when you get paid each month and how you keep your records. They will also set up a security deposit for the tenants. When they move in, they will collect the deposit and, when the tenant moves out, they will deduct any necessary fees and return the rest to the tenant in accordance with local regulations.
Screening and Selecting Tenants
Property managers will be screened for prospective tenants. This means that they will typically run credit checks, contact a rental reference, perform a background check, etc. to find the best tenant for your home. Some companies will choose the first qualified, while others will choose the best qualified from a handful of applicants.
Established property management companies should have written rental criteria that outline what they consider when selecting a tenant. This document is important because it allows you, the owner, and the tenants to see why they may not have been chosen. It also reduces the chances of claims for a Fair Housing violation if the property manager can indicate the published criteria for the refusal of the application.
They will also draft leases and make amendments, if necessary. Typically, they will have a standard lease that all tenants must sign. This may also include any required disclosures of such notices about lead, asbestos, and bed bugs. There may also be special lease provisions that you would like to add to the lease, such as what utilities or services (landscaping, pool cleaning) the tenants are responsible for or for any pets.
In the course of the tenancy, the property manager would also be responsible for enforcing the lease and resolving disputes. This could include repair of the damage caused by the tenant, correction of the HOA violations, and periodic walks to ensure that the tenants keep the house clean and sanitary.
The property manager would also advise whether to renew the lease and bring the rent up to market standards. With the complexities of cities with rent control or if your tenant receives government housing vouchers, the property manager can guide you through how much, and how often, rent can be raised.
The property manager may also modify the lease if necessary. Common lease modifications, or additions, are changes to the roommate, the addition of a pet, or allowing tenants to modify the property, such as installing a satellite dish or painting walls of a different color.
When the tenant gives notice to move out, the manager will be prepared to find a new tenant. The period between an old tenant moving out and a new tenant moving in is called vacancy. Be sure to ask any manager you plan to hire if they keep track of their vacancy period; it will give you an idea of how quickly and efficiently tenants can be replaced.