A property manager is a professional or business that markets, manages, operates and maintains a rental property on behalf of an investment property owner. The property manager may be an individual employed by the landlord, or a property management company retained by the landlord as an outside service provider.
How Do Property Management Companies Work?
Property management companies are third party service providers hired by an investment property owner to manage and operate a rental property. The property management company charges fees based on the services provided.
Property management fees are typically a fee charged as a percentage of the property's rental revenue. Property management companies may also seek commissions upon signing of a lease or charge additional fees for additional services. These fees depend on the market, property type, size of the investment property, and level of service needed by the property and property owner.
What Does A Property Manager Do?
The purpose of a property manager is to maximize a property's income and value by managing operational performance and efficiency while optimizing occupancy through effective leasing and marketing.
Whether a salaried employee or property management company, the basic tasks and functions of operating and leasing a rental property are common to both. In fact, a rental property is a business, so the tasks and function of operating a rental property parallels the same tasks and functions of running a business.
Property management consists of all the activities necessary to lease, market, and operate a rental property. These tasks and responsibilities include:
- Leasing & Marketing: Setting rental rates, creating marketing plans, attracting tenants, qualifying tenants, and negotiating leases.
- Accounting: Collecting rent, paying receivables, paying contractors, vendors and employees, record keeping, preparing budgets and financial reports.
- Maintenance & Repair: Maintaining the safety, condition and value of the physical property, responding to tenant complaints, finding contractors and managing improvements.
- Security: Verifying functioning of security and emergency systems. Ensuring policies, protocols and security patrols and personnel.
- Management & Administration: Maintaining systems. Implementing current technologies. Monitoring trends. Ensuring compliance. Assess risks. Identify opportunities and issues. Execute strategic plans. Ensure staffing.
Property management professionals must interact with tenants, vendors, fellow team members, and property ownership. Property management professionals must conduct themselves professionally at all times, even though they may be constantly called upon to solve problems in difficult situations.
How To Find A Property Manager
The approach taken to find a property manager depends on whether a property owner wants to hire an in house property manager, or outsource property management to a property management company.
To find an in house property manager, an investment property owner can simply post a job ad. There are many online job sites such as Monster, Indeed, Career Builder, and Select Leaders. Linked In is also a resource to find professionals that may be qualified for a property management position.
If an investment property owner chooses to outsource property management, the first step is to identify the management needs of the investment property. This is in large part determined by the size and type of property, the number of tenants, and the market the property is located in. It is also important to identify the key objectives of the investment property owner.
Referrals can lead to finding a property manager. By talking to rental property owners in the same market area who own properties of the same type and size, landlords may be able to find a property management firm provided their are no competitive conflicts of interest.
In larger buildings, the property management firm may be indicated on the building, or in space for lease advertisements and listings. Property management companies are always looking for new clients to grow their business, so they tend to advertise.
For large commercial properties, the large full service commercial real estate firms often have a property management division. These firms can be found on the internet and include CBRE, JLL, Colliers, and many more.