What exactly does a property management company do? In this article, we’ll break down the various responsibilities of a property management firm.
If you’ve been managing your own rental property, you might not fully understand the scope of services provided by a property management company. While they take over the management of your property, what does that entail? What processes do they follow?
The primary goal of hiring a property management company is to free up your time while ensuring that your property is well cared for. Most firms handle everything from tenant selection to maintenance repairs, so you don’t have to worry.
Before you hire a property management company, it’s important to know the tasks they perform and how they manage aspects like rent collection and tenant disputes. In this article, we’ll outline the fundamental responsibilities of a property manager and their operational methods.
Marketing and Leasing
When you first engage a management company, they should conduct an initial walkthrough of the property, including a video that highlights necessary repairs and updates. These recommendations aim to enhance your property’s appeal to attract quality tenants and minimize vacancy periods. They may also include repairs needed to make the home move-in ready and compliant with regulations, such as smoke alarms and secure door locks.
The property manager will oversee the marketing of your home, which includes capturing photos and videos, posting listings on various platforms, and conducting showings. It’s their responsibility to effectively market the property to ensure a swift rental process.
Look for examples of their photography on their website or Google profile. The images should showcase each room with proper lighting, highlighting the property's desirable features.
Established property management companies should be adept at determining the right rental price for your area. Reputable firms conduct rental analyses that outline the appropriate pricing for your home and the rationale behind it. Some companies, including Andren Homes, offer this tool on their website.
They’ll post your property listing on their own website as well as popular platforms like Zillow, Craigslist, and Trulia. Once your home is listed and receives applications, they will manage the tenant selection process and draft the lease agreement.
Screening and Selecting Tenants
Property managers are responsible for screening prospective tenants. This typically involves running credit checks, contacting rental references, and conducting background checks to find the best match for your property. Some companies may opt for the first qualified applicant, while others will select the most qualified from a pool of applicants.
Reputable property management firms should have written rental criteria that outlines the factors considered when selecting tenants. This documentation is crucial as it provides transparency to both the owner and potential tenants about why certain applications may not have been successful. It also minimizes the risk of Fair Housing claims, as the property manager can reference published criteria to justify application denials.
They will draft lease agreements and make any necessary modifications. Typically, they have a standard lease that all tenants must sign, which may include required disclosures regarding lead, asbestos, and pest issues. Special lease provisions can also be added, such as responsibilities for utilities or services like landscaping and pool maintenance, as well as pet policies.
Rent Collection and Accounting
The management company will handle rent collection from tenants. Some firms designate a specific property accountant for this role, ensuring that all payments are collected and that late fees are enforced for those who fail to pay on time.
If a tenant refuses or fails to pay rent, the company will initiate the eviction process. They likely have legal counsel to assist them in this procedure, though homeowners are typically responsible for any legal fees incurred.
Once rent is collected, the management company will deduct their management fee and any other miscellaneous charges (such as repairs) before disbursing the remaining amount to you. Most companies provide an itemized statement detailing any expenses incurred during the month along with your payment.
Clarify whether the company performs full-month or mid-month accounting, as this will affect your payment schedule and record-keeping. They will also determine the security deposit amount for tenants. Upon move-in, they collect the deposit and, upon move-out, deduct any necessary fees before returning the remaining amount to the tenant in compliance with local regulations.
Maintenance
Property managers are responsible for all maintenance related to your property, including initial repairs and improvements to ensure the property is ready for tenants once you engage their services.
They should have a list of trusted vendors for repairs and may even have licensed contractors on staff. There should be a clear process for handling maintenance requests, whether urgent or routine. This allows tenants to submit requests easily and ensures that the property manager can address them quickly.
Most property management firms offer a streamlined process for tenants to submit maintenance requests, including for after-hours emergencies. Depending on the company, tenants may be able to submit requests online via a maintenance portal like Appfolio or Buildium, or directly to the manager.
Other Management Duties
During the lease term, the property manager will be responsible for enforcing lease agreements and resolving disputes. This may involve addressing tenant-caused damages, rectifying HOA violations, and conducting periodic walkthroughs to ensure tenants maintain cleanliness and sanitary conditions.
The property manager will also advise you on whether to renew a lease and may suggest increasing the rent to align with market rates. In cities with rent control or for tenants receiving government housing vouchers, the property manager can guide you on how much and how often rent can be adjusted.
When necessary, the property manager can modify the lease. Common modifications, or addenda, include changes to roommate arrangements, adding a pet, or permitting tenants to make alterations such as installing a satellite dish or repainting.
When a tenant provides notice to vacate, the manager will prepare to find a new tenant to minimize vacancy periods. The interval between an old tenant moving out and a new tenant moving in is known as the vacancy period. Be sure to ask any prospective manager whether they track their vacancy periods; this information can give you insight into how efficiently they can fill vacancies.
In Summary
These are the fundamental responsibilities of a property management company. If you’re considering hiring a property manager in Santa Cruz, check out these four steps!
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Logan Andren
Logan Andren is the founder and CEO of Andren Homes Property Management. Since launching the company, Logan and his dedicated team have simplified the rental property experience for numerous Santa Cruz homeowners. Their mission is to enhance the lives of their clients and community, focusing on providing exceptional service and fostering lasting relationships. DRE #02002055
Get in touch with us:
✆ : (831) 291-5043
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