Imagine if you will, you need to lease out your mom’s old house. You found a few websites to advertise it on and figured it couldn’t be that hard. Then a friend at work told you it’s a hassle to handle a rental property and suggested that you look into hiring a property manager. You never really thought about it before. What kinds of things does a property management company do? I’ll explain.
What Things Are Done by a Property Management Company?
What things does a residential property management company actually do? They might do more than you think. Property managers have lots of specific tasks they perform while playing multiple key roles in the handling of a rental property. Here, we will cover the tasks performed by a full-service property management company. Performing these tasks may seem like a lot, but it is just one of several roles that a professional property manager plays.
Tasks Property Managers Perform
There are lots of tasks involved in operating a rental property. They are all the responsibility of the housing provider and part of owning a rental property. These tasks turn into chores that often need to be done at inconvenient times and are a big reason why many experienced landlords take on a property management company. Here are some of the tasks performed by property managers.
Fill Vacancies – To fill a vacancy, the manager will photograph and advertise the vacant property. Then they will take calls and show the property to prospective tenants to find interested people. The manager then screens the applicants to determine if they are qualified.
Once an acceptable tenant is found, the manager negotiates the lease, draws up the contracts, makes necessary disclosures, collects the deposit, records the condition of the property, and delivers the keys. All this needs to be done adhering to Fair Housing Laws.
Handle Moveouts
The management company receives the termination notice from the tenant or, in some cases, provides notice from the landlord to terminate the lease. The manager then must offer a pre-moveout inspection, collect keys from the tenant, do a moveout inspection, coordinate repairs, conduct the final inspection, and return the tenant’s deposit with proper reports, including explanations and the final accounting statement.
The move-out process is sometimes underestimated by rental property owners. Yet it can be the most continuous part of the lease lifecycle. There are lots of rules, timelines, and moving parts to deal with.
Make Ready for Rent
Property management companies help coordinate the preparation of a property to make it ready to rent. This can vary a lot depending on the condition of the property. A property may just need a little cleaning up, or a complete renovation may be required. Most of the time, there is at least some kind of refresh needed, which includes paint and some minor repairs.
The work needs to be done professionally at a reasonable cost and be timely. Getting it done right, right now, at a reasonable cost can be a challenge.
Collect Rent
Property managers collect rent each month. They keep records showing that the tenant paid and that the property owner received the rent. There will be records of how much and when the rent was paid. These records are then formally generated for tax purposes and available should you need them for a dispute with a tenant.
If rent is not paid on time, then the property manager will post notices and reach out to the tenant. Your manager will also assess the appropriate late fees.
Renew and Modify Leases
Property managers renew and modify leases. This includes extending the lease term, increasing the rent, occasionally decreasing the rent, or any other change in the terms of a lease. Sometimes people or pets need to be added to or taken off a lease. This can happen with annual leases or month-to-month.
The manager will often need to pull comps, negotiate new terms, and draw up additional paperwork to get signed.
Coordinate Maintenance
Coordinating maintenance is a big part of property management. This includes occasional repairs, preventative maintenance, and major projects. Calls need to be received and evaluated, often at inconvenient times. Technicians need to be scheduled with access provided and coordinated with the tenants. This involves many moving parts. Work needs to be verified, and vendors need to be paid.
Large projects can get quite involved with multiple bids and oversight. Small fixes have their own set of issues, including access to dependable vendors and scheduling conflicts.
Handle Lease Violations
Property managers deal with tenants who violate the lease. Tenants, on occasion, will do something that violates the lease agreement. They may bring in unauthorized pets, park cars on the lawn, clutter up walkways, or do something else that is not allowed in the lease. Property managers are the ones who post notices and deal with whatever comes next.
Most tenants respond well and are reasonable, while some can prove to be very difficult.
Oversee Evictions
Property managers are not eviction attorneys, but they do oversee the process. Managers reach out to the tenant, post notices, and, if necessary, initiate an eviction if the rent is not paid. This includes things like engaging an eviction attorney, going to court, negotiating terms of the move-out, and even being there for the police lockout. Then they make sure the property is secured.
Evictions are uncomfortable, time-consuming, and often very stressful.
Miscellaneous Tasks
A full-service professional property manager does more tasks and chores than we can list here. They work on tenant-to-tenant and neighbor disputes. They deal with utility companies and government agencies. They interface with Homeowner Associations. They help with making sure insurance is in place and work with insurance adjusters.
The list is never-ending, and we can’t name them all. Plus, the tasks are always evolving with changes in the law and people’s expectations.
Not Just Tasks
A professional property manager does much more than just chores and errands. If that is what you are looking for, you should hire a personal assistant, not a property manager. In California, a property manager is a licensed professional. They play many roles, including protective barrier, skilled facilitator, business identity, licensed representative, and trusted advisor. These roles are even more important than being a task manager, and they will be covered in a separate blog.
Bottom Line
Property management companies perform a lot of tasks. Property Managers fill vacancies by advertising, showing, screening, negotiating, inspecting, drawing up agreements, making necessary disclosures, and handing over the keys.
They handle moveouts, which involve multiple inspections, arranging repairs, administering deposit returns, including the accounting statement, with time deadlines and occasional disputes.
Managers oversee the make-ready process to prepare the property for rent, which needs to be done quickly, economically, and in a workmanlike manner.
They collect rent, requiring record keeping, reporting, follow-up, posting notices, and assessing late fees.
Property managers renew and modify leases, including rent increases, lease extensions, additional occupants, and any other change of terms.
They coordinate maintenance, which includes occasional routine repairs, preventive maintenance, and major projects.
Managers handle lease violations, helping enforce the terms of a lease by posting notices and interface with the tenant to resolve the matter.
They oversee evictions, which include posting notices, engaging an attorney, attending court, negotiating a settlement, attending the lockout, and re-securing the property.
Property managers do many other things, like deal with tenant conflicts, insurance companies, government agencies, and HOAs. New tasks come up all the time. However, a property manager does much more than tasks and errands. They are licensed professionals who play several roles, including protective barrier, skilled facilitator, business identity, licensed representative, and trusted advisor. This is where their real value comes through.
For Real Estate Advice
Remember, we are not attorneys, so we don’t give legal advice. Laws are always changing and vary depending on the specific municipality in which the property is located. For legal advice, please consult a real estate attorney familiar with the laws in your area.
If you are looking for a reliable property management company to help you handle a rental property or a real estate broker to guide you through the sales process in Long Beach, Los Angeles, or Orange County, California, or if you are just considering it and have a few questions about real estate, contact the Mike Dunfee Group today! We are happy to help.
Dunfee Real Estate Services, Inc. DRE # 02026232
