What is the Role of a Property Manager

You've certainly heard of property managers, whether you're a renter, an investor, or just interested in real estate, but what exactly do they do? Beyond what you may anticipate, property managers frequently perform many additional tasks in addition to simply collecting rent.

Let's look at some of the duties performed by property managers and what to anticipate if you decide to hire one.

What Is a Property Manager?

A property manager is an individual or entity hired by the property owner to oversee and manage the daily workings of their real estate investment. Property manager responsibilities include setting and collecting rent, handling maintenance requests, filling vacant units and 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.     Follows 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 that 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 that knows the area might be better equipped to make sure tenants are charged the correct amount rather than the property owner accidentally asking for a deposit beyond the legal limit and creating a potential legal issue because they weren’t aware of the local laws.

2.     Acts as A Local Presence for Out-Of-Town Owners

As the expert on-site, 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.     Handles Maintenance Requests

A property manager or property management company also handles maintenance requests and other in-person upkeep. A landlord that is slow to respond to maintenance issues can cause tenant frustration – 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 on-site 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.     Shows and Leases 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 of time. 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 potential tenants.

5.     Collects and Deposits Rent

Property managers also collect and deposit rent as a part of their duties for the properties they oversee. Some property managers and property management companies will collect rent using online sites or payment apps to help get money to the property owner quicker.

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 6% - 12% of the property’s overall monthly rental income, according to Mynd Property Management.

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 of Hiring a Real Estate Property Manager

• Beneficial for investors who own multiple properties: If you own multiple properties, it can become difficult to handle while still keeping 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 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.