Management companies provide a wide array of property management services to investors. The needs of each real estate investment may be different and the exact service offering of each company will vary, but here is an overview of the main services offered by residential property management firms.
Determine the best rental rate
A manager will perform a detailed evaluation of your property in an effort to determine the optimal rental rate. This typically involves documenting the interior and exterior with quality photos, offering recommendations on repairs and cosmetic improvements that will improve ROI, researching comparables and their current rental rates, and discussing with the owners the pros and cons of different policies and restrictions on the property.
Market the unit to tenants
A competent property manager should have a lot to offer and be actively involved in the process of gaining new tenants. This typically means preparing the home for rent, creating ads and marketing the rental online and offline, working with other realtors and leasing agents to find prospective tenants, fielding calls from prospects for questions and viewings, meeting potential tenants throughout the week and weekend for showings, providing a legally compliant rental application, and collecting the signed application with the application fee.
Screen potential tenants
The last thing any landlord wants is a troublesome or delinquent tenant. A property management company worth its salt will carefully screen potential tenants, perform the necessary background checks, grade the tenant according to predefined criteria and inform both the tenants who were selected and those who were turned down of the final decision. This doesn’t eliminate the risk of getting a bad tenant, but it does much to minimize it.
Supervise tenant move in
A property manager will provide assistance to tenants during the move in process. They will draw up the leasing agreement and review its requirements with the tenant to make sure they understand their responsibilities, ensure that all the necessary agreements have been signed, perform a detailed move in inspection, and collect the first month’s rent and security deposit.
Property managers are responsible for collecting rent from the property. They should deal proactively with late payments, sending out pay or quit notices, and enforcing the late fees specified in the leasing agreement.
Evict recalcitrant tenants
A good manager will be prepared to deal with this unpleasant process in an orderly fashion according to the law. They will know how to file the relevant paperwork to initiate and complete an unlawful detainer action, represent the owner in court, and work with law enforcement to remove the tenant and the tenant’s possessions from the unit.
Provide legal advice
A management firm will be able to provide advice in the event of a legal dispute or litigation brought against the owner. If necessary, they will refer the owner to a qualified attorney. Most importantly, a competent manager will understand and abide by the latest local, state and federal legislation that apply to rental properties, minimizing the owner’s legal risks.
Inspect the property regularly
Periodic inspections of the property to identify repair needs, safety hazards, code violations, lease violations, etc, and keep the owner informed of the condition of the investment.
Property management companies may provide a wide variety of finance-related services to real estate investors, including accounting services, annual reports for tax purposes, record keeping, advice on tax deductions, and monthly cash-flow statements showing income and itemized expenses.
Maintain and repair the unit
A management company will coordinate with the owner to make sure the property receives the necessary maintenance and repairs. The work may be performed by their in-house maintenance crew, or through a network of licensed, bonded, and insured contractors, who should be vetted for good pricing and work that is up to code. They should maintain a 24 hour emergency hotline that tenants can call to request urgent repairs.
Supervise tenant move out
When a tenant is ready to move out, the property manager helps facilitate the process by inspecting the unit, communicating with the tenant, refunding the balance of the security deposit, cleaning the unit, re-keying the locks, and putting the unit back on the market for rent.
This isn’t a comprehensive survey, but is a fair summary of the services typically performed by residential property management companies.