If you’ve recently started out in the real estate business and have glanced at the property manager job description, you might think you’re saving money by skipping this expense. You can handle all these tasks—right?
Think again. Half of the appeal of investing in rental property is the passive income it yields. Maximum financial reward for minimum effort. Everyone has the time to be a landlord for one property, even two. But once you have a handful under your belt, the workload can become a bit overwhelming.
Owning real estate shouldn’t be a job; it should allow you to live life on your terms, giving you the freedom to enjoy life when and wherever you wish. But you can’t do that if you’re spending all your time managing your properties. Whether you have just four or five properties or an entire empire, it’s best left to the experts.
Property manager job description: The 10 key tasks
Here’s how a property manager can help you grow your real estate business.
1. Setting the right rates
Pricing your property competitively is vital for every landlord. Too high and you won’t fill the space. Too low? Good luck making money. A property manager knows the micro market, local area, and current rental rates, enabling them to correctly value your buildings’ worth and price the units accordingly.
2. Marketing and advertising
You lose money every day your property is empty. Exposure helps you find tenants, and a property manager can help you create a coherent marketing strategy that will develop your brand, establish your reputation, and boost interest from prospective tenants.
3. Complying with housing regulations
State and federal laws around housing and evictions can be rather confusing. A professional property manager can walk you through everything, including paying taxes, discrimination laws, and needed certificates. But be warned that you are still liable if your property manager gets into legal trouble, so make sure they know what they’re talking about.
4. Finding good tenants
Property management companies find higher-quality tenants for filling vacancies because of their rigorous screening processes. These people often sign longer-term leases, inflict less wear and tear, and cause fewer problems. If you work alone, you might find yourself drowning in applications—but a professional property manager can assess applicants quickly and easily using a comprehensive screening process, including background and credit checks.
5. Collecting and depositing rent payments
Strict rent collection is crucial to financial success. A property manager acts as a buffer between you and your tenants so you don’t have to chase up late payments or listen to complaints.
6. Providing customer service
If you’re not a people person, it may be best to have someone else deal directly with tenant complaints. Not everyone has A+ communication skills—and that’s okay. A positive, smiley, helpful property manager will build up a rapport with your tenants and placate any problems with practiced ease. A property manager also ensures there is someone tenants can contact with issues, even when you’re on that two-month Caribbean cruise.
7. Handling maintenance and repair
Let’s be honest—no one wants to be woken at three in the morning because a pipe burst in a rental unit across town. When things inevitably go wrong, your property manager brings a set of management skills that help quickly and efficiently handle any problem. Remember, your tenants want problems solved immediately. Delays can lead to complaints. Thanks to their wealth of experience in real estate, property managers can also suggest preventative maintenance before a problem has even occurred.
8. Managing vendor relationships
When you do require maintenance or repairs, it can be a hassle to get the right tradesmen for the job. A good property manager will know reputable, reliable, licensed workers—and have good relationships with them. They should also have established policies to prevent any problems when the workers enter the property, which protects you from litigation.
9. Assisting long-distance investing
As your property empire grows, you may wish to begin looking for investments outside your immediate area. If you sign a contract with a state or nationwide property management company, you can rest easy. Your properties are all being looked after to the same high standard as you enjoy in your own town.
10. Maximizing profitability
If you intend to live off the revenue from your real estate business, you need to dedicate your time to searching for new investments. Once you’ve got a few rented properties under your belt, you’re probably ready to expand. But how can you do that if your time is spent dealing with tenants, addressing problems, and collecting rent? With daily operations handed over to your property manager, you’ll have more time to scour the market for that next investment.
Financial benefits of hiring a property manager
Don’t forget that hiring a property manager is financially sound. You may feel somewhat reluctant to fork out for this service, but it will pay dividends in the long run. These experts can maximize your business profits by creating distance between the property owner and tenants.
Most charge between 4% and 12% of your monthly rental rate—but remember that higher percentages often lead to a higher quality of service. Less is not more in this case, and a good property management company can be worth its weight in gold. Don’t skimp on this aspect of your business; it’s not worth it.
Of course, it’s important to do some thorough research before you hire your property management company. Ask your property manager these questions before signing on the line.
Do landlords need a property manager?
Clearly, a property manager wears a lot of hats. But maybe you think you can spare the expense and do the work yourself. The property management job description encompasses more than just basic tasks. Before you dive into managing your own properties, think about whether you can:
- Negotiate a decent rate on maintenance issues with a surly contractor.
- Keep track of at least three and as many as a dozen separate streams of incoming and outgoing money. Don’t forget rent and security deposits, some commingled and some not, across anywhere from four to a dozen different accounts… while being able to provide proof at any given moment of what went where, when, and why.
- Advertise property inexpensively and effectively without sacrificing your ability to get a tenant who will pay a reasonable rent and not destroy the place before move-out.
- Handle all of the property maintenance—including those 3 a.m. floods.
- Communicate with, placate, and motivate tenants who have conflicting goals and priorities.
Property management advanced skills
That job description is just your run-of-the-mill, no-frills property management. If you want a top-of-the-line real estate empire, you need all those skills at their peak level—plus the ability to:
- Navigate a court case, remaining professional and calm.
- Comprehend the effects that the large-scale and local-scale market movements are having on each client’s properties. In addition, predict how that will affect your ability to charge, your future costs, and the client’s risk levels.
- Work with finicky city inspectors to bring buildings that were—just last week!—70% hellhole into the realms of livability
- Comprehend the systems used by your writers, inspectors, agents, photographers, builders, vendors, and so on well enough to troubleshoot and help guide them toward effective solutions.
This might seem easy to you, or maybe even fun. If that’s the case, feel free to dive into the property management world solo. But if you find the above job duties frightening, hire an expert to deal with the nitty-gritty.
However, you must remember: It’s your business. You’re the CEO, the big cheese, the top dog. Therefore, don’t get bogged down in the day-to-day running of things. Leave that to someone else, someone qualified and experienced and capable of making you lots of money. As a real estate investor, it’s your job to sit back and watch the money roll in.
Do you use a property manager in your real estate business? Why or why not?
Let me know with a comment!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.