How do property management companies work?
If you’re a property owner trying to decide the best way to manage your real estate investments, you may be considering hiring some help.
As you weigh the pros and cons, you may wonder what a property management company even does. Property management companies do a lot more than just collect the rent. We’re here to break down how a property management company operates and what it does, so you can decide whether hiring one makes sense for you.
Managing Mountains of Paperwork
Perhaps the most important service a management company can perform for a busy rental property owner is to handle record-keeping and paperwork. The clients that routinely deposit rental applications, leases, rent checks and complaints at your door will now turn to a property manager, not you.
The residential property management service is your mediator, go-between, and public face for your tenants. Have you been run ragged by keeping up with applications for spaces, checking on references, remembering to repair a hot water heater in Pacific Beach while still having time to change a lock in El Cajon?
All those tasks, and more, become the work of your property management firm.
Handling Resident Applications
Every real estate owner, whether you own a multi-family property or just a few family homes, needs to follow the law and handle rental applications with care.
Not only must references be checked, responses need to be swift. All aspects of the rental process, from advertising to screening, must also follow the law.
A management service can relieve you of those burdens. The right property manager can thoroughly screen applicants and bring you dependable tenants.
Collecting the Rent
Yes, property management companies collect the rent. But they do more than cash those checks. Not only will a full-service property management company help you set the right rate for a given property, it will also enforce late fees impartially, make rent adjustments as needed, and follow the law regarding rent increases.
Both at move-in and at move-out, the renter-landlord relationship can be challenging. By turning to the expertise of a management service, you can rest easy knowing everything will be handled professionally. And, should the need arise to deal breaches of contract (refusal to pay rent; consistently late with rent), an experienced San Diego management company can file the right paperwork and quietly move ahead with eviction.
A full-time property service company will intercept all those never-ending calls regarding maintenance, emergencies, and repairs on your properties.
In addition to routine maintenance and landscaping, your property manager can call on the right contractors for plumbing, electrical, HVAC, carpentry and masonry repairs. Most property management firms in the greater San Diego area have extensive networks of reliable, responsive contractors.
Late-night emergencies or early-morning calls to complain about air conditioning or backed-up toilets no longer are your headache. Your asset management company takes the calls and arranges the solutions while you slumber peacefully.
Coming Up Empty
Perhaps more distressing to the typical real estate investor in the San Diego area than dealing with an array of rented properties is the occasional empty unit. An idle unit is expensive in at least half a dozen ways:
- It can quickly degrade in exterior appearance
- Its systems (HVAC, plumbing, electrical) can break down from inattention
- It is susceptible to mold and mildew
- It produces no income but continues to cost you money
- It can be plundered for pipes and furnishings
- Squatters can attempt to invade
An adept and active property management service can turn empty properties around in quick order, so your income stream is unaffected and your property maintains its value.
When to Step Up
Many property owners are unsure when they should make the leap from handling all the work themselves to turning day-to-day chores over to a local property management service.
Consider these factors:
- Your properties are scattered
- You do not live near your properties
- You have a lot of properties or rental units
- You cannot keep up with the workload
- You do not want to have to hire and fire property managers, maintenance staff, or cleaning crews
- You have no interest in dealing with the daily operations
- You earn enough through rents and leases that the 5-10% of rent revenue is well worth giving up for the many benefits you get in return
- You notice an uptick in maintenance requests, turnover in leases, or repair work
- You have affordable housing and need expert advice on dealing with municipal, state and federal agencies
If any of these scenarios sound familiar, it may be time to consider hiring a property management company.