Is it time to hire a property manager? I read last month “Across the United States evictions have become increasingly commonplace and have disrupted numerous lives and, combined with decreases in rent-controlled units and decreases in affordable housing, evictions are poised to be the next significant challenge for landlords.” Evictions are one of the time consuming jobs of real estate investors who attempt to manage rentals on their own.
Hiring a property manager is one of the biggest decisions you’ll make as a landlord. Many landlords manage properties on their own or with the help of an employee, such as a resident manager. But sometimes landlords need more help, they are stressed by the business of caring for renters, and that’s when a property management company might make sense. Here are 8 circumstances that answer the question should you hire a property manager according to NOLO.
- You have lots of properties or rental units.
- You don’t live near your rental property.
- You’re not interested in hands-on management.
- Your time is limited.
- You can afford the cost. .
- You’re suddenly inundated with management tasks.
- You don’t want to be an employer.
- Your property is part of an affordable housing program. In order to continue receiving the assistance, the landlord must comply with a complicated set of rules.
What does a property manager do?
The recent article in Inman cites five main things special to a property manager:
- Finds the right tenant. The cost of choosing the wrong tenant is steep — in terms of time, money and, in some cases, legal difficulties. Finding and placing a qualified tenant demands both diligence and knowledge. A qualified tenant is a tenant who passes a background and credit verification check as well as receiving a good reference from current and past landlords and employers. Finding a qualified tenant also involves setting a rental price, and advertising.
- Creates a good lease. After successfully qualifying the tenant’s application, it’ll be the property manager’s responsibility to draw up a lease that is both fully compliant with the law and 100 percent enforceable.
- Fixes things that break. If something breaks, leaks, bursts or wears out — it’ll be the property manager’s responsibility to determine the cause of the problem and get it fixed.
- Collects rent and handles evictions. In the event the tenant stops paying rent, the property manager will attempt to collect it by sending written correspondence and making phone calls. If the collection efforts fail, the property manager will determine that it’s time to evict. The property manager will have to send a legal notice instructing the tenants to pay or vacate the premises. After that, it’ll be time to file a lawsuit in court.
- Keeps track of income and expenses. Finally, there’s the task of accounting. Tracking the income and expenses for a rental property isn’t just a good financial habit for her to build — it’s the law.
Where do I find a good property manager?
Erin Eberlin, Landlords & Property Investments Expert, offers six tips to help you choose a property manager:
- Ask for referrals to property managers. Talk to real estate agents and other property owners in your area. Find out what they liked and where there were problems.
- You can also do an online search for property management companies. Websites like T-Rex Globaland AllPropertyManagement allow you to plug in the size of your property and your location and they will generate a list of property management companies in your area.
- Check out the actual properties they manage. Do they look like something you would be proud to have them manage your properties? Talk to the tenants. Are they happy? Have their complaints been addressed?
- Interview several property managers/management companies so you can find the one you are most comfortable entrusting your property to.
- Check Their License and Certification. You should check with your state’s Real Estate Commissionto see if their brokerage license is active. Has the company or manager been certified by a trade organization such as the Institute of Real Estate Management (IREM), National Apartment Association (NAA), National Association of Residential Property Managers(NARPM) and the Community Associations Institute (CAI). These organizations offer certification after completion of a rigorous training program.
- Examine the management agreement. The management agreement should clearly define the responsibilities of the property managerand that of the property owner.
What does a property manager cost?
The average property manager charges somewhere between 50 and 100% for the first month’s rent as a finder’s fee and then 8 to 10% of the monthly rent. A renewal of an existing tenant would not generate a finder’s fee.
Above all, a great property manager enables you to stay on the right side of the law.
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