Many of you that own rental properties will need to get a property manager. This is someone you hire to handle day-to-day operations at the building. For all intensive purposes they are the face of the company and who all the tenants will be dealing with. If you are new to real estate investing it may seem confusing as to what is your responsibilities vs the property manager. Here’s a breakdown:
At Ali Safavi Real Estate we have our apartment managers deal with 99% of tenant relations. This means screening and interviewing potential renters and dealing with any problems that arise. For this reason you want to make sure whomever you pick is a good people person. A breakdown in tenant relations can cause a world of problems. The better they are at interacting with people the smoother the building will run. This is why it also helps to hire someone with experience. Knowledge really is power in the property management business. This includes knowing all landlord-tenant laws.
Priority one: make sure the tenants pay on time. Much of the time this won’t be a problem. However, if you’re in the game long enough at some point someone is going to try and not pay. It doesn’t make them bad people, but this is a business and rent has to be paid on time. If it’s a tenant that you want to keep and this is the first time, often a quick reminder email will do the trick. The next step would be implementing a late fee. You really want to avoid the eviction process, but it is there if needed.
The property manager is often also in charge of setting rent, or at least suggesting what the rent should be. They understand the market and what price is attractive to new tenants. This could mean raising the rent if the building is in a desirable neighborhood, or lowering it if the vacancy lags on.
As important as it is to collect rent, making sure the building doesn’t crumble is equally important to your bottom line. The property manager should have a list of contractors and maintenance people that can come out and fix any problem under the sun. One leaky toilet can turn into thousands of dollars in repairs. This also includes making sure the building looks nice and is clean. Vacancies happen all the time, so you want to make sure the building always looks its best.
It’s critical that the property manager properly manages the budget and maintains proper records. The whole point of staying vigilant is to save money over the long run. It defeats the purpose if your property manager is wasting money.
This is another super important part of the job. The longer a unit stays vacant, the more money you lose. The biggest variable is often a building's location. Whatever the case, property managers should never assume the unit will sell itself. Make sure to always have pictures taken of the vacant unit and to post on the relevant apartment listing sites in your area.