Property rental is a lucrative business for investors and homeowners, but it isn’t always easy to handle the responsibilities that come with it. While it is a piece of cake for some, many would prefer to outsource it for various reasons.
A property manager can keep your revenue coming in, address tenants’ priorities, keep the property in great condition, ensure all the legal issues are taken care of and much more.
However, these are only possible when you hire an experienced professional property manager. Doing the opposite can lead to unhappy tenants, legal issues, dwindling income, and other bad situations for business.
To help you avoid hiring the wrong manager, we’ve explained below how to get a property manager and every other detail you should know about hiring the best managers for your rental properties.
What Does a Property Manager Do?
So, who is a property manager, and what do they do? A property manager can be a firm or an individual, and they are a middleman or third party whose job is to take care of a real estate investment’s day-to-day activities.
A property manager or management company may either manage a single property or multiple-family homes for you. They handle all property issues, from marketing to attending to tenants’ challenges.
It is also possible to find property managers who handle only some aspects but leave the rest for the landlords. This is usually based on the agreement between both parties and is likely factored into the manager’s fee.
In case you were wondering about the exact services you can get from property managers, here is a list that sums it up:
- Property advertisement and marketing
- Interview and assessment of potential tenants
- Lease agreement processing and execution
- Property inspection
- Overseeing property repairs and maintenance
- Rent collection
- Preparing accounts and other reports
- Ensuring compliance with local and national laws
- Serving as an intermediary between the landlord and tenants
Types of Property Managers
When you decide to hire a property manager for any or all of the responsibilities mentioned above, the next thing is to determine your goals and the best type of manager to help you achieve them. Here are the types of property managers and what each one offers:
Individual Property Manager
If you’re hiring just one person to take care of your real estate investment, you’re hiring an individual property manager. An individual property manager should be enough if you want them to oversee just one rental property or a few.
Individual property managers are usually more affordable, and as they possess the appropriate experience in the industry and expertise, you should get excellent service and the ease of dealing with just one person.
Bare in mind, however, that your property is likely one of many they manage, and their attention will naturally be split across all such properties.
Another downside to hiring an individual property manager is that they may not be in the best position to handle more properties if you plan to add more to your investment portfolio. Therefore, that comes with the issue of dealing with multiple managers for multiple properties.
Property Management Companies
Property management companies are firms like GlobalResidential that have multiple trained property managers, and other personnel, as employees to help you manage your real estate investment.
This is a better option if you want someone to handle multiple properties because they have employees to delegate to in handling different elements of property management.
However, it is also possible that a property management company simply assigns managers to your properties. So, you may want to find out how they operate before handing over your property.
Other things to consider when hiring a property management company include the management fee. You may be paying more for their services, but you’re also likely getting more hands on deck, which is usually a good thing for you and your tenants.
How to Get a Property Manager
If you’ve decided on the type of property manager you want, it’s time to look into how to get a property manager. The process includes online and offline research, assessment of documents, and interviewing multiple candidates.
While it may appear tedious, it can be the opposite, especially considering how important it is to get it right. To help you set clear expectations, these are some features you should be looking for in your potential property manager:
- An excellent track record of managing similar properties.
- Transparent processes and fees.
- Good behaviour and manner of dealing with people.
- Good communication and problem-solving.
Now that you know what to look for, below are the steps you should take.
1. Research Good Property Managers
The internet is an excellent solution to many things, and it’s a perfect place to start your search for the best property manager for your properties.
Start with a simple Google search, but do not forget to localise your search if the search engine does not apply automatic localisation. Search for “property manager around [town].”
This will help you narrow down potential individuals and property management companies around you or where your property is located.
Make a shortlist of those that qualify and do a quick check of the services they offer, their schedule, management fees, leadership experience, staff information, special offers, client and landlord testimonials and reviews, contact information, and anything else you’d like to know.
2. Ask Around for Recommendations
Whether you have enough prospects from your online search or not, it’s always a good idea to ask those around you for recommendations. Verbal recommendations from friends, relatives, and colleagues are usually a good indicator of good service.
You may also ask other property owners and estate agents about their property managers and management companies. If multiple people recommend the same firm or individual, that’s an indication that they offer excellent services and may be suitable for you too.
3. Examine Their Qualifications
Property managers need to be qualified and must comply with certain standards. These qualifications can vary depending on the state where your properties are. You may need to check the National Property Management Association website for laws specific to your area.
Aside from area-specific qualifications, the property manager must be licensed since they will oversee your rental property’s legal aspects. It also helps when they have additional qualifications or certificates of training that have helped them gain knowledge and experience.
4. Review Their Portfolio
As you continue to narrow down the list you started with, one of the things you may want to look at is the property managers’ current portfolio. This should be available on their website and will contain a list and details of the properties they manage.
The portfolio should hint at the kind of properties they manage, their services, their professionalism, and how they advertise properties, among other things. A visit to the properties they manage should reveal what your property would look like if you let them manage it.
If the properties they manage have good exteriors and appear well-managed, there’s a good chance they’d achieve the same with yours. Speak with the tenants if you can. You’ll get information about the management.
5. Check Online Reviews and Presence
When an individual or company offers excellent service to clients, they’re bound to have positive online reviews, but just how much can you invest in online reviews?
There’s no doubt that reviews can be misleading, but knowing what to look for with each review will help you judge how good the services genuinely are.
When reviewing property managers, you must check if the reviews come from landlords or tenants. Each one has its use, but you should pay more attention to those that are from house owners like you. If they are positive, it is a sign that you have a manager that holds your interest as important to them.
However, simply counting the number of 5-star reviews is not enough. Read the comments to find out why they’re getting the reviews. While 5-star reviews can indicate impeccable service, they can also be from their relatives and friends. So, check if they have enough to mean they’ve actually managed many properties.
Property management can be challenging, and issues are inevitable. The 3- and 4-star review helps you discover specific improvements the manager needs to make. Also, check their replies to these reviews to see how they deal with feedback.
Do they acknowledge mistakes, apologise, and take responsibility? Responding to reviews shows they value their reputation, but doing these things shows transparency and maturity.
Another factor you should look at is their online presence. You can check this through their website, blogs, and social media interaction. If they’ve been posting helpful information for landlords and tenants, it shows knowledge and a willingness to help.
6. Meet With Prospects and Ask Questions
Meeting with the remaining options on your list will help you get up close and see their personality. Before meeting with prospective property managers, list your expectations for your property and ask how they’d help you achieve them.
Ask questions to confirm some of the information you’ve gathered online. See how they respond to your inquiries and how willing they are to help you understand their services and fees. This will help you gather more information and clarify if the property management is a good fit for you.
In addition, meeting and asking questions allow both parties to understand expectations and prevent disappointments. It helps to ask specific questions, and here are some examples that may be relevant for you.
- How many years of property management experience do you have?
- Do you review property documents, such as lease agreements?
- What is your property management fee?
- What services are included in the management deal?
- How often do you give reports, and how do I get them?
- Will I pay you when the property is vacant?
- How do you advertise rental vacancies?
- What is the tenant screening process?
- How do you determine a fair rate for properties?
- Which processes do I have to be involved in?
- How do you handle property maintenance?
- How do you handle late payments and evictions?
- What will you do in case of emergencies?
7. Check Their Communication and Follow Up
Aside from qualifications and experience, you should also assess their communication skills and how they follow up. Do they speak clearly and to the point? Are they prompt with follow-ups when getting back and how transparent are their explanations? Do they arrive early for meetings?
Of course, you may not get the whole picture during meetings and interviews, but you stand a better chance with a property manager that takes care of all these aspects right from the start.
8. Clarify Services and Fees
The services and fees offered by a property manager may differ from what you get from another. Hence, it is essential that you clarify what to expect from them and how to work out your expenses from the property.
You should know about a few fees regarding hiring a property manager. Here’s a brief explanation:
- Property management fee: The property management fee is the main fee charged by property managers for their services. It is usually charged monthly and can either be a percentage of your monthly rent or a flat fee.
- Maintenance fee: The maintenance fee is used to keep your property in good shape and may be charged with the property management fee or separately, depending on your agreement with the property manager and the scale of maintenance required.
- Leasing fee: The leasing fee is paid at the successful renting out of a unit of property. It is a one-time payment, and some project managers do not demand it.
- Lease renewal fee: This is similar to the leasing fee, with the only difference being that it is paid when tenants renew their lease.
- Eviction fee: In the event that you need to serve an eviction notice to a tenant, property managers will charge this fee for services concerning the eviction, including communication with attorneys and court representation.
Pros and Cons of Using a Property Manager
There are a couple of advantages and disadvantages of using a property management company or an individual property manager. They include:
Advantages of Using a Property Manager
Delegation of property management duties
As a property investor, you may also be involved in other activities that need your attention. Hiring a property manager helps you do these things while delegating property management to a manager. You also get more time to spend on family and leisure without worrying about your property.
Hands-on experience and expertise
Property managers have been handling properties for many landlords and, unlike you, will have practical experience regarding property management. This will be beneficial for overseeing different issues concerning your property.
Reduction of turnover
As a result of their experience, property managers are equipped with the knowledge to help you reduce turnover. Their constant availability helps tenants solve issues quickly, and they may offer special bonuses with your consent to keep tenants happy.
If your property is located in up-and-coming areas in the UK, there’s a good chance you’re not in the same city as your rental investment. Hiring a property manager will help you compensate for your absence by attending to whatever needs your attention.
Easy outsourcing of property maintenance
When maintenance issues arise, property managers usually have those they work with get it out of the way as fast as possible. The bottom line is, maintenance requests are time-consuming. Having managers to deal with them will save you time, energy, and money while keeping tenants happy.
Disadvantages of Using a Property Manager
Property management costs
For all the many benefits of hiring a property manager, it also means you’ll have to part with money to pay the fees. The services of a property manager may not be cheap, but is property management worth the cost? Absolutely!
Reduced control over your property
Another disadvantage of hiring a property manager comes through relinquishing some control over your property for the managers to do their duty. You also need to avoid getting involved in the day-to-day running to avoid getting in the way.
Reduced communication with tenants
You also get reduced communication with tenants who now have to deal mainly with the property manager. Some managers even have you agree to a no-communication condition before taking on the job to streamline communication.
Choosing a professional property manager is important for getting the most out of your property in the long term while keeping your tenants happy, especially if you’re not around or do not have the time. Use the tips above to hire the best property managers. And if you need more help, feel free to reach out to us today.
Frequently asked questions(FAQs)
How much does a property manager cost?
Property management fees vary. While some charge a flat fee, others base it on a certain percentage of the rental income.
What percentage do property managers take?
Most property managers will charge between $8 – $12, but make sure you agree on your monthly fee. Ask them what is the average property management fee for rental properties during the interview.
Are property managers regulated?
There are currently no independent regulatory bodies, but property managers may submit to voluntary regulations.
Do property managers pay for repairs?
Most property managers will agree with you on a specific percentage for maintenance and repair costs or inform you to cover the fee whenever there’s a need.