New or novice rental property owners may find that being a landlord entails more than they bargained for. That said, enlisting the help of one of Gaithersburg’s top property management companies is the next logical step. However, you may be unfamiliar with the responsibilities of a property manager and just how much they can benefit property owners. So, if you are on the fence about whether to hire professional help, continue reading below. We will give you the rundown on what services an experienced, highly qualified property management company should offer you.
What is Property Management Company?
A property management company is a third party that works to maintain a rental property’s status quo for a monthly or annual fee. This includes many operational tasks along with handling all tenant communications. Depending on the company, contract, and the owner’s individual needs, a management company can handle all aspects of running a successful rental business. Thus, allowing owners the opportunity to focus their efforts and energy on other things knowing their rentals are taken care of.
What Are the Responsibilities of a Property Manager?
For busy rental property owners, doing everything on your own may not be the best option. After all, a landlord has many tasks that only increase the more properties you own. So, to better understand the benefits and responsibilities of a property manager, check out the essential functions of a rental management company below.
- Targeted Marketing
- Thorough Tenant Screening
- Tenant Move-In and Inspection
- Preventative Maintenance and Repairs
- Rent Collection
- Dealing with Defaulters
- Routine Property Inspections
- Accounting Services
- Move-Out Inspections
- Tenant Communications and Complaints
One of the most important responsibilities of a property manager is to limit vacancy time. Therefore, these companies use their extensive local market knowledge to create targeted advertising. Thus, helping to procure a qualified tenant faster than if the owner had done everything alone.
They utilize a diverse set of platforms such as Craigslist, MLS, online classifieds, popular rental sites, and local community boards to expose listings to a wide group of prospects. Additionally, these professional leasing efforts include diligent follow-up on all leads, property tours, and pre-screening applicants – all while being Fair Housing compliant.
Thorough Tenant Screening
Detailed tenant screening is an owner’s best defense against problem tenants. Therefore, a property management company will screen all applicants against a standard set of qualifications that comply with all Fair Housing Laws. This is a key reason to enlist the help of a property manager. The last thing you want to do is be sued for unintentionally discriminating against an interested tenant.
Typically, standard screening includes background and credit checks to ensure applicants have no criminal background, previous evictions, or large outstanding debts. Additionally, it is vital to verify the applicant has steady and sufficient income to cover the monthly rent. Also, a good property manager will request a previous landlord or other professional references. This provides valuable insight and serves as a predictor of the tenant’s future behavior.
Tenant Move-In and Inspection
Move-in day is an exciting and potentially stressful time for both tenants and landlords. Thankfully, one of the responsibilities of a property manager is to ensure a smooth and hassle-free move-in experience. Some of the tasks a property manager completes on or before move-in day include, but are not limited to –
- Drafting and procuring signatures on a legally compliant lease according to the property’s specific needs
- Detailed move-in inspection with all parties, complete with photographs
- Collection of the security deposit and first month’s rent, along with any applicable pet or parking fees
- Provide tenants with a Welcome Pack that includes vital property information, contact numbers, maintenance responsibilities, and local area information.
- Lastly, a property manager will provide tenants with keys to the property.
Preventative Maintenance and Repairs
Anytime the tenant has a maintenance or repair request, a property management company is the one to handle it. Ideally, one of the key responsibilities of a property manager is to provide a 24/7 response to any emergency repairs. That said, some management companies employ special after-hours tech to handle these calls, but regardless, responsiveness when it comes to maintenance is vital.
For owners, not having to take after-hours calls from tenants is one of the best benefits of enlisting the help of a team of property managers. Not only do they have the resources to handle emergencies, but they also take the pressure off of you and having to be available all the time.
Sending out rent reminders, processing rent payments, and disbursing payments to owners is one of the major responsibilities of a property manager. After all, receiving rent is the goal of rental investment.
The best property management companies will offer tenants several ways to pay rent conveniently. Nowadays, most tenants expect to pay online, as this is more efficient for everyone involved. In fact, with online services, tenants can set up automatic payments, so they never forget to send their payments.
Dealing with Defaulters
Even with the best precautions in place, sometimes tenants fall behind in rent. Many times, diligent communication can resolve these issues with tenants to avoid costly court proceedings. However, in addition to collecting rent money and following up with tenants, property managers will initiate eviction proceedings as needed.
This includes filing paperwork to start an eviction, sending out proper notices, representing property owners in court, and facilitating the removal of tenants. These situations can prove stressful if you do not have experienced professionals on your side. So, having a reputable third party representing your interests can make the process more efficient and protect you from malicious tenants.
Routine Property Inspections
Making sure the property is being well cared for throughout the lease term takes a lot of effort. Thus, having a property manager conduct seasonal inspections is helpful. Not only can routine inspections check to make sure the tenant is satisfied, but your property manager can also make sure the tenant is fulfilling their obligations.
Additionally, finding small maintenance issues early can save big – before problems become major issues. It is also a great way to find out what would make your tenants happier. All of these things will ultimately aid owners in their quest for success as property owners.
Property management companies have a duty to maintain all financial documentation related to your rental property business. So, here are some things a property manager will likely handle while managing your rental –
- Proper accounting of all rent payments collected, including receipts
- Annual reporting of all financial statements, including a 1099 form
- Monthly income/expense reports
- Documentation of any payments made on the owner’s behalf (utilities, HOA, insurance premiums)
- All maintenance estimates, work orders, and invoice/payment receipts
- Yearly tax information for the property itself and the rental property business
While it can be helpful to hire a separate accountant to help you with your yearly rental financials, just know that an experienced property management company can handle most, if not all, documentation for you. In fact, some property managers will even help you file your annual taxes so that you do not have to hire external services.
Just as your property manager helped move your tenant in, they are responsible for helping the tenant move out.
When a tenant gives notice, a property manager will prepare marketing for a new tenant. In addition, they inspect the unit as a whole to determine what, if any, tenant damage can be withheld from the security deposit. That said, the move out process includes some of the following steps –
- Provide tenant with a detailed list of estimated damages
- Return the remaining balance of your tenant’s security deposit
- Re-key all locks and make any repairs
- Clean rental property for next tenant that will move in
- Place vacant property back on the market
Tenant Communications and Complaints
Ideally, a property management company will have a 24-hour hotline for tenants. This is essential for handling emergency maintenance calls and protecting your valuable investment. However, not every tenant’s call is for a maintenance issue.
Having someone available during business hours to handle regular repair requests, questions, or tenant complaints is critical. Often, a disgruntled tenant will only become more upset if they have to leave messages or play phone tag trying to get assistance. So, having a property manager to act as a buffer against these situations means less stress for the owner and more efficient resolutions for tenants.
The 5 Benefits of a Professional Rental Management
The responsibilities of a property manager are numerous, and so too are the benefits. While it is possible to manage rentals on your own, savvy landlords know that leaning on the experience of professionals can maximize your investment’s potential. Check out these five benefits of property managers below –
- Reduced Vacancy – Local knowledge is vital to finding the best tenant in the shortest amount of time. Thus, property managers can use their experience to create urgency, fill vacancies, and increase profits by keeping the asset in service.
- Quality Tenants – Thorough screening is the backbone of finding great tenants. So, utilizing property management services is the best way to find quality tenants – fast!
- Reduced Liability – Following Fair Housing Laws is essential to avoiding costly discrimination disputes. In addition, the training and expertise provided by professionals help limit an owner’s risk of such claims.
- Lower Maintenance Costs – The access to in-house maintenance techs and a network of trusted 3rd party vendors gives investors the chance to lower maintenance costs and get work completed more efficiently.
- Higher Tenant Retention – Property turnover costs money, and so, tenant retention is a big deal for successful rentals. Property managers help to ensure tenant satisfaction and leverage renewals to help keep great tenants in place.
Why Hiring the Right Property Manage is Key?
Every decision a rental owner makes has the potential to cost or save them money in one way or another. Yes, hiring an experienced team to handle the responsibilities of a property manager costs money, but the benefits can certainly outweigh the capital investment.
At Bay Property Management Group, our focus is on rental management and that alone. But, whether your rental property is in Montgomery County or beyond, we can help. Our team of managers, leasing professionals, accounting staff, and maintenance techs is on hand to ensure no detail of your rental business is overlooked. So, if you are new to the industry or realizing self-managing may not be the best choice for you, get in touch with Bay Property Management Group today.