Property managers play a crucial role in the management and maintenance of rental properties on behalf of property owners. Inexperienced investors may not fully understand the nature of their role and all they do to support the success of their investments.
If you want to be an effective investor, you must understand where these responsibilities start and stop – what your manager handles versus what the investor is responsible for. Manager responsibilities can vary, but these are typically what investors should expect and look for in property management.
8 Responsibilities of Property Managers
1. Maintain positive resident relationships
An owner-investor doesn’t usually deal directly with rental residents. It’s the property manager’s job to secure great residents through a diligent vetting process that includes credit and background checks. They also oversee the lease agreements and the move-in/move-out process. Managers must have a good rapport with residents, as they’re the point of contact for anything and everything – including questions, concerns, and requests!
2. Collect rent efficiently
Property managers coordinate with the property owner to set appropriate, competitive rental rates. They’re also the ones who collect payment each month. This includes chasing down any delinquent payments and initiating evictions if necessary.
3. Facilitate repairs and maintenance
Property managers attentively monitor your rental property for any issues. They provide both routine and emergency maintenance, keep a strong working relationship with vendors and professionals in the area, and ensure that your property maintains its value and structural integrity.
4. Advertising your property as needed
Need to fill a vacancy? The property management team should handle marketing and advertising with an approved budget. Whether it’s buying and placing ads, putting up rental listings, or spreading the word in other ways, it’s their job to target the right audience and manage your property’s public image.
5. Financial management
Managers handle the budgeting and accounting for rental properties – while providing detailed financial and performance reports for the owners. They will also handle recurring bills on behalf of the property owner.
6. Legal compliance
There are local, state, and federal laws protecting rental residents and guiding the conduct of owners and managers. Your management team should be in-the-know and up to date regarding all these rules and regulations.
7. Security and Safety
Is your property safe? Management handles it – from security systems, locks, and windows to dealing with any potential hazards.
8. Emergency Point of Contact
Thank goodness you’re not the one getting called at two in the morning to unclog a toilet! Managers are expected to be on-call 24/7 in case of emergencies. Residents and owners alike rely on their responsiveness in crisis.
7 Responsibilities of Property Owners
1. Property Ownership
Property managers do not own the properties they manage. Ownership stays with the property owner, and the property manager acts as a representative. Naturally, the owner should communicate their goals and expectations to their team.
2. Final Investment Decisions
You, the investor, command investment decisions. The manager is simply there to help your investments thrive. Where you invest, types of properties, and buying and selling...these decisions are in your hands.
3. Major Renovations or Capital Expenditures
While property managers may oversee routine maintenance and minor repairs, major renovations or capital expenditures usually require owner approval and are not initiated by property managers. If you’re looking to make serious property improvements, you’ve got to get that ball rolling on yourself!
Investors handle financing the property, including mortgage payments, refinancing, and obtaining loans. The manager can (and will) make payments on your behalf, but only if authorized. Ultimately, this part is up to you.
4. Property Insurance
Property managers aid in coordinating insurance claims for property damage, but the responsibility for obtaining and maintaining property insurance lies with the property owner. An advisor can help determine the type of policies and coverage you need.
6. Legal Representation
Property managers are not legal representatives for property owners. If legal action is necessary, you must obtain legal consultation and representation on your own. We recommend finding legal professionals with ample experience in the real estate industry.
7. Investment Strategy
Decisions related to the overall investment strategy, such as long-term goals, portfolio diversification, and financial planning are up to you. Take advantage of a portfolio or investment advisor. They’ll help you clarify your goals and how to achieve them in an effective, sustainable manner.
Ultimately, investors and their property managers should have a clear and detailed agreement outlining the scope of the manager's responsibilities and the expectations of both parties. Effective communication and a well-defined management agreement are key to a successful relationship.
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