Understanding the Basics of Property Management

Property managers provide services that protect the rights of both landlords and tenants. They also possess an understanding of local and state laws to comply with regulations and legislation. 

Property managers take over the general duties and services that landlords are obligated, by law, to provide to tenants. Here are the basics of property management. 

Collection of Rent

This is arguably the most essential job description of property managers where they are tasked with the collection of rent – on time. Rent collection is important because landlords usually have other bills to pay, including mortgage payments and allocating a budget to major repairs. 

Property managers usually have access to diverse payment mechanisms including money orders, credit cards, and e-wallets for rent collection. They may also collect the rent in-person, but the general goal is to save time and money. The most professional method is to collect rent through ACH or credit card online. 

Property Maintenance

It’s in the job title – property managers are required to keep the rental unit in working condition. This means taking care of water leaks, keeping the HVAC unit running, clearing out the dust, making sure the electric wiring is safe, and even interior decor. 

Property managers usually maintain a link of vendors to reach out to in case of emergency repairs. This also lowers the cost of repairs due to economies of scale and keeps both tenants and landlords happy in the long run. 

They also schedule ongoing preventive maintenance to identify minor issues that require repairs and nip them in the bud before they get a chance to escalate (requiring expensive repairs).

Finding New Tenants 

A key reason for hiring property managers is to minimize the rental vacancy rate. Every month that the rental unit goes unoccupied represents a significant expense to both property managers and landlords. Rental vacancies can be avoided by having a strong marketing funnel to have access to qualified leads. 

This allows property managers to find a suitable replacement once a tenant decides to pack up and leave. Property managers usually plan ahead for vacancies by placing ads during peak rental season to find qualified leads. 

Marketing requires a dedicated skillset and most property managers may decide to outsource to a firm. However, they still have to provide walkthroughs of the house. Virtual showings may be prioritized to save time. 

Reporting

Property managers expose them to liability issues when they take on the duties of a landlord. Their best defense against allegations of misconduct, failing to follow the law, and other claims, are to maintain a record of all correspondence with both tenants and landlords. 

While reporting keeps them safe from lawsuits, it also helps landlords see how their property is doing in terms of cash flow. Property managers usually work with accountants to maintain a balance sheet for each asset with details about how funds are spent, used, and allocated. 

Evictions

Property managers come in handy when dealing with delinquent tenants. They understand the process of eviction – when push comes to shove – without breaking the law. Eviction is a sensitive process with several moving parts that must be handled with care. 

Property managers usually have a system in place to help them streamline the eviction process and deal with delinquent tenants (including tenants who have breached the lease agreement and/or failed to pay the rent on time). This includes sending advanced notifications according to local/state laws. 

Wrapping Up

So there you have it, the five major basics of property management. As you can tell, property management is more than just collecting rent. It’s about maintaining a working relationship with landlords, tenants, and vendors. Another key role is to learn about local and state laws to make sure no rights are violated. 

It is strongly suggested to hire property managers near you to not only alleviate the responsibilities associated with landlordship but also stay on the right side of the law. Get in touch with us to learn more. 

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