If you’re a property owner or investor, you may be considering hiring a property management company to handle the day-to-day operations of your rental properties. This post will guide you through what you can expect when working with a property management company, including their responsibilities, services, and fees. Our goal is to provide you with a comprehensive overview so you can decide whether hiring a property management company suits your rental property needs. So, keep reading as we dive into the world of property management together!
Typical Property Manager Responsibilities
Most property management companies offer their clients the same basic suite of services, including:
Tenant screening is a crucial part of the property management process, as it helps ensure you have responsible and reliable tenants in your rental properties. A thorough screening addresses items like,
These checks should include reviewing the tenant’s criminal history, credit score, and rental history. This process helps identify any red flags that may indicate that the tenant is a risky candidate.
This process involves verifying that the potential tenant is currently employed and has a steady source of income. Property managers can do this by checking pay stubs and tax returns or obtaining employment verification through their employer.
Speaking with the tenant’s previous landlords is essential to understand their rental history. This can include how long they stayed at their last rental, if they paid their rent on time, and if they left the property in good condition.
Establishing income requirements as part of your screening process helps ensure the tenant can afford the rent. Generally, the tenant’s income should be at least three times the monthly rent amount.
Typically, property managers establish screening criteria that apply to every applicant. This process ensures that all tenants are evaluated fairly and consistently and could include factors such as credit score, rental history, and income. Some local governments have established their own screening rules, which good property management companies will understand and follow.
Fair Housing Laws
Following housing laws when conducting tenant screening is critical, which bars discrimination based on a potential tenant’s race, religion, gender, or other protected characteristics. Property managers will use these guidelines to help them select the best possible tenant for your rental property.
Rent collection is another essential aspect of property management that requires careful attention and management. When working with a property management company, here are several points that they will consider:
Rent Payment Terms
Property managers should clearly outline rent payment terms in the lease agreement and include the rent amount, payment due date, late fees, and accepted payment methods.
Online Payment Options
Offering online payment options, such as direct deposit or online payment portals, can make it easier for tenants to pay rent on time and streamline the rent collection process for property managers.
Late Payment Policy
Property management companies should create clear late payment policies outlining late fees and penalties for late rent payments. This can incentivize tenants to pay on time and discourage late payments.
Property managers should consistently follow up with tenants behind on rent payments to address any issues and ensure that payments are received promptly.
Good communication with tenants can help to avoid misunderstandings and prevent late rent payments. Regular reminders, notifications, and updates can help tenants stay on top of their rent payments.
Property managers must be aware of legal considerations when it comes to rent collection, such as eviction laws and fair debt collection practices.
Overall, effective rent collection requires clear communication, consistent follow-up, and a strong understanding of legal considerations. By implementing the tips outlined above, property managers can help ensure that rent payments are collected on time and in compliance with legal requirements.
Good property management companies should be involved in maintenance and repair tasks to ensure that the property remains in good condition and safe for tenants to live in. Those responsibilities should include,
Property managers should conduct regular inspections to identify any maintenance issues to address. This can include checking for leaks, inspecting electrical systems, and ensuring safety equipment functions correctly.
Tenants should have an easy way to report maintenance issues, such as a maintenance request form or online portal. Property managers should respond promptly to these requests and schedule repairs as needed.
Property managers should also prioritize preventative maintenance to minimize the need for more costly repairs down the line. This can include regular cleaning, HVAC maintenance, landscaping, and more.
Property managers should budget for maintenance costs and prioritize repairs based on their level of urgency. This can prevent costly emergency repairs and ensure the property remains in good condition over time.
Good property management companies will have a network of reliable contractors to call on for repairs and maintenance tasks, including contractors for electrical work, plumbing, and landscaping.
Property managers should ensure that the property complies with safety regulations, such as building codes and fire safety regulations. By prioritizing maintenance and timely repairs, property managers can ensure that the property stays in good condition for the benefit of tenants and owners.
Lease agreements establish the legal terms of occupancy between the tenant and landlord and will become critical should disputes arise. Property management companies should provide all leasing documents which include the following elements:
The lease agreement should clearly outline the terms of the rental agreement, including the rent amount, payment due date, security deposit amount, lease length, and any restrictions on the use of the property.
The lease agreement should also state the tenant’s responsibilities, such as maintaining the property in good condition, paying rent on time, and complying with applicable rules and regulations.
The lease agreement will outline the landlord’s responsibilities, such as providing a safe and habitable property, maintaining the property in good condition, and responding to maintenance requests in a timely manner.
Lease agreements should include information about renewal options, such as whether tenants can renew the lease and under what terms.
Finally, any lease agreement should include a termination clause outlining the circumstances under which the parties can terminate the lease, such as for non-payment of rent or violating the lease terms.
By ensuring that lease agreements are clear and comprehensive, property managers can help to prevent misunderstandings and ensure that the rental agreement is mutually beneficial for both parties.
Owner and Investor Services
Property management companies should provide excellent service to owners and investors to ensure their properties are well cared for. Here are a few factors to consider when choosing potential property management partners:
- Communication: Property management companies should maintain regular contact with property owners to keep them informed about the status of their property, any maintenance issues that arise, and rental income.
- Marketing: Property management companies should have a marketing strategy to attract potential tenants. This can include advertising on relevant websites, social media platforms, and other channels.
- Financial Reporting: Property management companies should provide accurate financial reporting, including income and expense statements. This ensures that property owners are kept up-to-date on the financial performance of their property.
- Legal Compliance: Working with a property management company ensures that the property complies with all relevant laws and regulations, such as building codes, safety regulations, and fair housing laws.
By performing these services well, property management companies can help property owners to maximize their return on investment with as little stress as possible.
Property management companies typically charge fees for the services they provide. While every company is different, here are a few common ways to structure property management fees:
- Percentage of Rent: Many property management companies charge a percentage of the monthly rent as their fee. This fee can range from 4% to 10% of the monthly rent, depending on the property’s location and the services provided.
- Flat Fee: Some property management companies charge a flat fee for their services based on the number of properties managed or a specific package of services.
- Lease-Up Fee: Some property management companies charge a one-time fee to find and place a new tenant in a property. This fee typically equals one month’s rent and is charged when they find a new tenant.
- Maintenance Fee: Some property management companies charge a fee for maintenance and repairs, either as a percentage of the repair cost or as a flat fee.
- Vacancy Fee: Some property management companies charge a fee if a property is vacant for a certain period. This fee encourages property managers to find tenants quickly and keep the property occupied.
- Eviction Fee: Some property management companies charge a fee if an eviction is necessary. This fee covers the costs of the eviction process.
Property owners should review their management contracts carefully to understand the fees incurred for management services. By understanding the costs associated with property management, owners can ensure that they get the best value for their money and that their properties are well-managed.
Partner With a Local Expert
Are you ready to start working with a property management company in Portland, Oregon? Rent Portland Homes by Darla Andrew can help! We help local owners get the most from their investments using our decades of management experience and superior customer service. Call or text us today at 503.515.3170, or fill out the contact page on our website. We can’t wait to meet you!