In simple terms, property management is actually the job a person performs, related to taking care of the property, so it can help the owner. In exchange for this service, the owner pays a certain amount of money to the manager, while he acts like his eyes and ears, and also as a contact person between the tenants and the owner. When the owner hires the manager, they also sign a detailed contract which includes the managers duties, schedule and salary.

In general, a property manager is hired if the owner has more properties, has limited time available or if he simply needs help. A good manager is extremely useful if the owner lives far away from his properties or he simply doesn’t want to get involved too much.

Some of the duties involved in being a property manager include property maintenance, administrative tasks, different repairs and paying the bills. Owners also have the possibility of contacting rental property management companies to help them rent their properties, agencies which will take care of everything from screening tenants to negotiating contracts and creating marketing strategies. Having a property manager also means that he will help collect rent, will deal with tenant complaints and he will even handle the process of eviction.

Property Manager

Even though you may have heard about property manager, it’s possible that you have no idea are his duties. Basically, he deals with all the necessary tasks and obligations related to the real estate area, and he is capable of handling all types of properties. When he signs a contract, he will have a detailed list of all his duties, including the salary that is directly proportionate. Here are a few examples:

Responsible for Rent

The main task it to set the rent level for that property, collect the rent and even adjust it when it is necessary.

  • Setting the rent – he is very capable of setting the rent, mainly because he has a very thorough understanding of the real estate market and the prices asked throughout the neighborhood.
  • Collecting the rent – He establishes a fixed date for collecting the rent and he makes sure that all tenants pay on time, otherwise he will apply late fees.
  • Adjusting the rent – he has a thorough understanding of the local or state laws, and this is why he is able to adjust (increase or decrease) the rent, based on a certain percentage.

Responsible for Tenants

Another important task is managing the tenants. He must deal with finding, screening and accepting the tenants, as well as taking care of all complaints and evictions.

  • Finding the tenants – a property manager must deal with all the marketing strategies so that he can find tenants for the properties. He has a deep understanding of what attracts a tenant, and he is able to propose different changes on the property before marketing it.
  • Screening the tenants – he must do the necessary background investigation so he can choose the tenants that best fit the owner’s requirements. The property manager will run credit checks, criminal background, talk to former landlords, but most importantly, he has the necessary experience to help him choose the best ones.
  • Handling the lease – one of the main duties is creating the lease, setting the length, the amount of the security deposit and all other necessary provisions that will help the owner be safe.
  • Taking care of emergency/complaints – he has to be available to solve all types of maintenance issues, noise and damage complaints, but also have all the important numbers in case of an emergency.
  • Moving out situations – he must inspect the property after the tenant has moved out so he can make an estimate on the damages and establish what amount must be retained from the security deposit. He also has to clean and repair the property, and start the screening process all over again.
  • Eviction situations – in case tenants cause problems with the rent or other terms of the contract, the property manager knows how to deal with the situation, and is able to start the eviction process.

Responsible for Maintenance and Repairs

It is important to know that a property manager also deals with the constant maintenance needed, and all the urgent repairs that appear overnight.

  • Maintenance – a property manager must take care of the property maintenance so it remains in a high quality condition. This being said, he must do the necessary hiring when it comes to removing the trash, checking and repairing the leaks, taking care of the landscape, and even to shovel the snow.
  • Repairs – in this case, the property manager must make the necessary repairs by himself, or by hiring someone to handle them. In general, a professional property manager has an entire team of plumbers, electricians and carpenters that are ready to work.

Responsible for Knowledge of Landlord-Tenant Law

It is crucial that the project manager you hire has a thorough understanding of the local and state laws regarding a few aspects, including:

  • Tenant screening
  • Asking and handling the security deposits
  • Closing a lease
  • Evicting tenants
  • Apply all safety standards.

 

Responsible for Supervising

  • Other employees working on that property – these may include security personnel or even a concierge. All have jobs to do, and the project manager’s task it to make sure they do it, otherwise he is able to cut their salaries or even fire them.
  • Vacant properties – sometimes a project manager also has to take care of certain vacant properties, to make sure everything is in order, no vandalism attacks happened and do a bit of maintenance, assuring everything is finished on time.

 

Responsible for Managing the Budget/Maintaining Records

Another major responsibility that a project manager has, is maintaining a budget for the property and keeping all the records of the expenses.

  • Managing the budget – all expenses must be held within the initial budget, but there are special situations where the severity of the problem is so high, that the project manager has to go over that limit.
  • Keeping records – he must have detailed records related to all types of expenses and income, including inspections, maintenance, collecting the rent, repairs, insurance and complaints.

Responsible for Taxes

  • A property manager is always capable of helping the owner have a better understanding of the taxes he must pay for his property.
  • He is also able to file the taxes on behalf of the owner.

Tenant

A tenant is a person that has the right, according to a written contract, to a structure or a piece of land. While the contract is available, the tenant is allowed to use the property according to the rules included, but he must also follow a set of responsibilities, just as the landlord. Depending on the local and state laws, the terms in the contract may vary. A simple example is the fact that a tenant is a person that has full rights over the property, due to the leasehold agreement. However, the contract may be terminated by either party involved, but only with a reasonable notice.

A property or a piece of land may also be rented or leased for the purpose of opening a business, creating a farm or any other types of administration. A leasehold agreement is very popular as it offers higher security and flexibility. Let’s take, for example, a retail store owner, which is allowed to make any type of change in order to help him in his purposes, versus an apartment tenant, which is not allowed to make modifications to the property.

 There are three main options through which a landlord will receive his rent: the traditional way, paid on certain dates, through a profit sharing agreement or with a work-exchange program; it all depends on the terms of the contract. Another thing to keep in mind is that rent may be paid on a monthly basis, but there are situations where it can be paid weekly, quarterly or even yearly, but if the terms aren’t respected, and the rent is not paid, the landlord has the right to evict the tenant.

 The owner must make sure that the property has all the proper living conditions, or that the land is safe to be used. In order to ensure this, he must know the regional property and building codes, and his responsibilities for any type of repairs and maintenance. For example, if a property has a stove and after a while it breaks, the owner’s obligation is to replace it.

One of the main tasks of a tenant is that he must always maintain the property in perfect conditions, even if this involves cleaning the gutters, taking care of a garden or simply maintaining the furniture. The wear and tear of the paint, appliances and carpeting is allowed as it is a natural phenomenon, but not excessive damages, as the owner will have the right to seek financial assistance from the tenant. In general, all the responsibilities and rights related to both parties, can be found in the government agencies that deal with housing laws.

 When it comes to leasehold agreements, things are a bit different, because the tenant is responsible for all repairs and maintenance, as well as restoring the property to the initial condition when the lease ends.

Two Common Types of Property Management

Property management is a diverse field.  Although there are several types of specific properties, there are two main types of property management—residential and commercial.  In this property management blog, we’ll cover the main concepts of both.

Residential Property Management

 

  • There are residential property management companies that are in charge of all types of properties, including apartments, mobile homes and land. An owner hires a property manager so that he can take care of all his duties and his financial investments, so he can obtain a profit.
  • A property manager is needed so that the owner doesn’t have to spend his time verifying his properties, and that all his requests and decisions will take place. Hiring a property manager also means that the owner will have enough time to focus on other investments or to simply focus on their family.
  • Each property has different residential property management services. The contract between a project manager and the owner is what establishes the tasks of the manager, his goals and his salary.
  • There are property managers that have to deal with searching, screening and handling the tenants. They are also in charge of contractors, landscapers and even small repairs. Other tasks may include bookkeeping, contracts and any other legal tasks.
  • From time to time, a residential property manager may also advise the owner about other potential real state investments. In other occasions, the owner may not even live in the same state, so the manager is delegated to find different properties, bid for them and deal with all the financial transactions.
  • In order to offer all the above services, the residential property manager will follow different types of training so he can improve his management skills, personnel management, and real estate local and state laws. There are states in which property managers must have a license.
  • When it comes to property management companies, they may include a single manager or a team of mangers which are able to manage different properties. There are situations in which they only deal with a single investor that has multiple properties.
  • They offer flexible services that depend on the investor’s needs. An investor may choose different properties around the world and a specific residential property management company will take care of all of them. Without their help, investors will not be able to take care of all their real estate portfolios.

Commercial Property Management

 

  • A commercial property is specially designed for business investments. It is different from industrial properties which include different types of manufacturing plants, as these deal with shopping centers, office spaces, service stations and hotels. To put it simply, it deals with the moneymaking part of the business, without including the production of products and services.
  • The zoning laws related to real estate tend to vary from state to state when it comes to commercial property. They present a clear delimitation when it comes to commercial, residential and industrial properties, even though some people may find these regulations a bit confusing, especially when it comes to properties that may have different functions. A clear example is a residential house that is rented as a business venture, which, in general, it is not considered to be a commercial property, but a building that has several apartments is considered a commercial property.
  • Even research facilities such as hospitals with built-in labs and single laboratories, are sometimes considered to be commercial properties. In this case, even a doctor’s office as well as any other building in which services are offered to the public, may be considered commercial properties.
  • Commercial properties are also subject to different taxes that depend on their jurisdiction. There are cities that want to attract investors, so different incentives, in exchange of a small delay in paying property taxes. In case a certain business will offer higher benefits to the entire community, the incentives are extended.

There are state in which it is quite difficult to make the difference between an industrial and commercial property. When it comes to a property that has both retail and manufacturing, it is even more difficult to make the difference. There are also state where you need to have an exception, which you can obtain from the local jurisdiction, in case you plan on having both retail and production.

A Word About Modern Technology

Whether a property management business focuses on residential or commercial properties, there are distinct advantages in using a modern property management system.  Property software has evolved emmensely and incorporates nearly every aspect of the industry, thus is regarded as a necessary tool for sound property management.  For instance, managers can update accounting in real time via the use of cloud based property management software.  Another great feature of rental software is that it improves communication with tenants, property owners, vendors, and service personnel.  Finding a the best online property management software should be one of the first things a manager accomplishes. {image wrapped to right}