Deciding to use a property manager is a major step, which means you need to consider all of the ramifications of your decision. They can provide many important services, relieving you of the burden of the day-to-day management of your properties. But just as in any service industry, the cost for this kind of individualized attention is high. Standard pricing for the industry is generally between 4-12% of gross rents, usually tending towards the higher end for single-family dwellings and lower for large apartment buildings.
The property manager can offer a wide range of services depending on the company and your individualized needs. The major areas in which they can be most helpful are:
- Marketing your rental property to minimize the number of vacancies.
- Maintenance and repair, including emergency repairs.
- Analysis of income and expenses to be sure the property remains profitable.
- Administrative duties such as negotiating rental agreements, collecting rent, and responding to tenant requests.
In addition to these basic services, some property managers can provide solutions to more specialized needs. Rick Kinnaird, President of Half Vast Enterprises, has two rental properties and he uses property managers for both. One is a single vacation rental unit, and the other is a number of vacation rental units at one location. He says property managers can “provide cleaning and linen service during turnover for guests. They can also maintain the yard and lawn, replace light bulbs and do handy man work even construction.”
So how do you find a property manager to suit your needs? Rick says that they’re often connected with a real estate firm. However, there are individual companies that work directly with property owners. The best way to find a property manager is to ask around in the area where you are looking for those kinds of services. Be sure to keep in mind that most states require a property manager to have a property manager’s license or a real estate broker’s license.
There are some real advantages for property owners to have someone else look after the daily operations. Rick says, “You can go on vacation, or do your regular job and not worry about getting a call in the middle of the night.”
But you aren’t always lucky enough to find a property manager who knows their job, says Rick. They may not do what you ask, and ignore your instructions. With big firms, they may keep sending someone out to reset a breaker and charge you for the service call and never diagnose and fix the problem.
Another thing to keep in mind when you are looking for a property manager is that there is a difference between them and a resident manager. According to Rick, “A property manager doesn’t typically live at the property. They come in on a regular basis and carry out specified chores and do inspections. A resident manager is on the premises and may spend considerable more time taking care of the property; that’s the up side. The down side is they may come to believe the property is more theirs than yours.”
The way to avoid a situation in which you lose control of your property is to understand exactly what services will be provided by the manager, and then to develop a strong relationship with them to be sure they understand how you want things done.
