What Does A Property Manager Do?

Whether you’re an investor, a renter or just curious about real estate, you’ve probably heard of property managers – but what do they do? Property manager duties span beyond what you might expect; they often do much more than just collect rent.

Let’s explore a few of the responsibilities handled by property managers and what you can expect if you decide to work with one.

What Is A Property Manager?

A property manager is an individual or entity hired by a property owner to oversee and manage the day-to-day operations of their real estate investment. Property manager responsibilities include:

• Setting and collecting rent
• Handling maintenance requests
• Filling vacant units
• Potentially setting the budget for the property

Property managers often take care of property that real estate investors either do not live near or do not wish to personally manage. A property manager can be one person or an entire management company, depending on the needs of the owner.

What Do Property Managers Do?

The main purpose of hiring a property manager or management company is to protect your real estate investment and passive income. Investors hire property managers to manage their rental properties for a variety of reasons, from wanting a local professional to handle a property to a desire to take a more hands off approach with their properties.

But what does a property management company or manager do when tending to the properties they oversee? Let’s go over a few common responsibilities typically held by property managers.

1. Follow Landlord-Tenant Laws And Regulations

As an investor, especially if you own multiple properties in several different states or areas, it can be difficult to keep track of all the different landlord-tenant laws and regulations. A property manager can help avoid potential legal headaches by taking care of these regulations for you. Typically experts in the areas where they work, property managers are often better equipped to deal with local laws and regulations.

As an example, in some states there are specific requirements on how much a tenant can be charged as a security deposit. A property manager who knows the area might be better equipped to ensure renters are charged the correct amount rather than the property owner accidentally asking for a deposit beyond the legal limit. In this case, the property manager would prevent the property owners from creating a potential legal issue because they weren’t aware of the local laws.

2. Act As A Local Presence For Out-Of-Town Owners

As the onsite experts, property managers also act as a local presence for out-of-town owners. If a property owner has lived in Texas their entire life, they may not be equipped to deal with the intricacies of managing property somewhere they’re unfamiliar with, like California or New York.

A property manager can take care of those details for them – along with other things that come up, like maintenance and other operational issues that would be difficult to handle remotely.

3. Handle Maintenance Requests

A property manager or property management company also handles maintenance requests and other in-person upkeep. Tenants get frustrated at landlords who are slow at responding to maintenance issues – which is why it’s useful to have a manager onsite to address tenant concerns quickly.

Maintenance requests could be anything from broken appliances to unwanted pests or wildlife in a tenant’s home, so having someone present to take care of these issues as they arise is vital. A lack of landlord support with issues in rental properties can cause tenants to take their business elsewhere when their lease is up, so it’s important to have a strong local presence to take care of tenant needs.

4. Show And Lease Vacant Units

Working with a property manager can also help owners eliminate the potential financial loss of having an empty unit sitting around for an extended period. Rather than trying to market your property remotely to potential tenants, you can rely on a property manager to attract new tenants and potentially renew existing leases.

Tenants may also be uneasy about or unwilling to move into a property without seeing it first, and showing off properties may not be an option if the owner lives out of state. Working with a property manager allows owners to have someone present on the property to fix problems and show off the full potential of spaces to prospective tenants.

5. Collect And Deposit Rent

Property managers also collect and deposit rent as a part of their duties for the properties they oversee. To get money to the property owner quickly, some property managers and property management companies will use online sites or payment apps for rent collection.

Property managers may also handle delinquent payments, collections and evictions. Working with a property manager ensures that these tasks that might be difficult for investors to handle from afar are dealt with efficiently to save owners money and time.

How Much Does It Cost To Work With A Property Manager?

The cost of working with a property manager or management company varies by the particular company and location. The average cost is usually between 8% – 12% of the property’s overall monthly rental income.

Besides a percentage-based management fee, you might also pay the following costs to work with a property manager.

Management Fee

Some property managers or companies might charge a flat fee for their services rather than a percentage. Like the percentage, this cost varies based on the company or individual and the location.

Maintenance Fee

Maintenance costs are part of managing a property, whether you’ve hired someone to help or not. Some property managers might charge a fee to cover the costs of monthly repairs that they may have to take care of for tenants, while others may bill you based on the incident. In either case, the manager or management company may also charge you extra for their services in handling the incident.

Leasing Fee

Your property manager might also charge a leasing fee (also known as a new tenant placement fee) to cover the costs of marketing your property to potential tenants. This can include the costs to market the property, manage applications and tenants and move-in costs as well. Similar to the other fees, this might be charged as a flat fee or a percentage of monthly rent.

Lease Renewal Fee

Some property managers charge a fee when a tenant wants to renew their lease as well. Like the other fees, this might be a flat rate or a percentage of monthly rent. This fee covers the cost of the time it takes to renew the lease and get the tenant’s signature. Many property managers skip this fee, however.

The Pros And Cons Of Hiring A Real Estate Property Manager

There are both advantages and disadvantages when choosing to work with a property manager to look after your investment properties. Before hiring a property manager, consider the pros and cons, your budget and your personal needs.

The Pros Of Hiring A Real Estate Property Manager

Let’s first take a look at some of the benefits of enlisting the help of a property manager.

• Beneficial for investors who own multiple properties: If you own multiple properties, it can become difficult to keep all your tenants happy. Hiring a property manager assures that your properties and tenants will still get the work and attention they need even if you don’t have time to take care of it yourself.
• Allows you to invest in other places: One of the main perks of working with a property manager or management company is that it allows you to invest in properties far away from you without worrying about managing everything yourself remotely.
• Not responsible for operational tasks: Another notable benefit of having someone else manage your properties is that they will take care of maintenance and upkeep. Rather than attempting to tackle any and all repairs yourself, you can rely on a property manager or their in-house maintenance team to take care of the work for you.

The Cons Of Hiring A Real Estate Property Manager

Now let’s look at a few of the drawbacks of hiring a property manager or management company.

• Must relinquish control of the property: When you work with a property manager, you must relinquish some of your direct control over the property and allow them to take care of things for you. While this helps you avoid the hands-on work of managing a property, it also means they may do things differently than you would.
• High property management costs: Working with a property manager isn’t free – as we noted above, you’re likely to be charged multiple fees in exchange for the service of a property manager. These costs vary, but tend to be a decent portion of what you make overall in monthly rent. Research property managers before working with one to confirm it works with your budget.
• Less control in the tenant screening process: Property managers often take over the task of screening potential tenants to live in your properties. While they still have screening standards, property managers might be less strict than you would be screening tenants yourself, which some real estate owners may not like.

The Bottom Line: Property Managers Are Trusted With Great Responsibility

Property managers can be a huge help to real estate investors who might not be near the properties they own or simply don’t have the time to manage. The services of these managers are not free, however, and their services may not appeal to all real estate investors.

Before deciding to work with a property manager, consider your financial and personal needs as well as the needs of your property and decide whether you would be comfortable relinquishing some control of the investment to a third party.

If you’re ready to purchase your next investment property, get started today with Rocket Mortgage^®.