What Is a Property Manager?
What Does a Property Manager Do?
Property managers oversee many different types of real estate, often in commercial, industrial, residential and retail settings. They are typically compensated by collecting a small portion of the gross rent paid by the tenants under management.
The job description of a property manager includes the following tasks.
A property management company handles all aspects of managing tenants. This includes finding and screening them. Since the success of every income-generating property hinges on the ability to find and keep good tenants in place, this is one of the most important roles of a property manager.
Property managers use various methods to find and attract tenants while minimizing vacancies. They advertise vacant rental properties and screen prospective tenants to ensure their background checks and credit scores meet specific requirements.
Property managers are also responsible for drafting lease terms that cover every aspect of a rental agreement, from protecting the property owner’s interests to resolving disputes. While attorneys usually prepare lease agreements, property managers will often ensure the lease agreement protects the owner’s interests, while ensuring that the tenant and can cover any issues that may arise in the operation of the property.
Property managers can also handle conflict resolution between tenants. For example, if two tenants in a duplex have complaints about one another, a property manager can intervene and act as a mediator between both parties.
A property manager will also communicate with tenants when their rent payments are late and likewise, they will manage the eviction process when tenants stop paying altogether.
Setting and Collecting Rent
When a property owner enlists the help of a property management company, they typically allow the property manager to determine the monthly rent payment and task the property manager with collecting each monthly rent payment. Property managers can also enforce penalties for tenants who do not pay rent on time.
Finally, it is within the jurisdiction of property managers as well to evict tenants, because of vandalism, defaulting on rent, or violation of the property rules. After an eviction, property managers also inspect vacated rental units for damage and repair them where necessary.
Operating Staff and Managing Finances
In larger commercial buildings, complexes, and communities, a property manager will also manage the staff and employees who serve the residents or occupants of the property. This makes them responsible for hiring, supervising, and terminating staff. As a result, property managers for bigger commercial establishments need people skills to lead a variety of on-site employees.
On the backend, some landlords also task property managers with wide-ranging financial and accounting responsibilities. They may be asked to draft budgets, calculate costs and expenses, or hit revenue targets. They also need to maintain a thorough financial record for the property.
Property Maintenance and Security
Property managers also oversee the property’s maintenance and security. This responsibility includes janitorial, painting, fixing plumbing issues, hiring third-party contractors to fix heating/cooling or ventilation issues, and other types of deferred maintenance.
From time to time, the landlord may also decide to make improvements to the property as they deem appropriate. The property manager will take the lead in renovating units and/or common areas and coordinating contractors doing such work.
A property manager also ensures the safety and security of guests and tenants. They verify compliance with fire and flood regulations by maintaining equipment and personnel. Property managers are also responsible for the acquisition of security equipment and workforce, such as CCTV cameras, when necessary. They also handle emergency situations by creating an emergency response plan.
Ensuring Legal Compliance
A property manager will ensure the property complies with all relevant and applicable laws, depending on the state and county. One of the most important is tax compliance. Property managers may need to file returns on behalf of property owners and give advice on related issues.
Pros and Cons of Hiring Property Managers
Hiring property managers comes with both pros and cons.
Landlords with many units located in different states, cities, or countries cannot manage their properties effectively without property managers. A good property manager is often what makes buy-and-hold investing possible for owners who do not live near the property.
Managing property directly can be stressful. Property managers handle the stresses involved with managing property on a day-to-day basis, such as tenant complaints, tenant conflicts, late rent, staffing, and other tasks. This leaves landlords more time to grow their business and investments.
Owners who hire seasoned property managers can rest easy knowing the manager can optimize their property to make as much revenue as possible. Property managers advertise the property and advise on ideal rental prices. In addition, local property managers can also discern the property’s local situation, which is ideal for owners who maintain rental properties in many places.
Owners relinquish some of their operational control to their property managers. While owners may technically have the final say in many administrative matters, property managers know more about operations and are practically independent of the owner, save for rental oversight.
Generally, property management fees range from 4-12% in the United States, depending on the size and type of property, along with the responsibilities of the property manager. However, additional costs can add up fast depending on the owner’s agreement with the property manager.
For instance, some property managers have setup fees charged for new accounts. Other costs may include leasing fees charged for getting new tenants, which can be as much as 24-100% of the entire first month’s rent. It is also the property owner’s responsibility to pay for all costs associated with holding and improving the property, which is added on top of the cost of the property management company.
Property managers are either individuals or companies tasked with managing property on behalf of its owner. They have many responsibilities, from managing tenants, maintaining the property, managing the workforce, and ensuring the property complies with all applicable regulations.
While many owners hire property managers to declutter their day-to-day tasks, their costs may be too much for some owners to pay, especially if the owner is still a novice.
- Chron. (2020.) The Role of Property Managers. Retrieved from https://work.chron.com/role-property-managers-11347.html
- Muela, J. (n.d.) Property Management Fees – Part I. ManageMyProperty.com. Retrieved from https://www.managemyproperty.com/articles/property-management-fees-part-i-10