Responsibilities of a Property Manager
Many people know that being a property manager is a real job and may even know someone who does this for a living, but may not fully understand what a property manager entails being. A property manager is an independent person or company who has been employed or hired to take on the responsibility of managing the day-to-day operations of real estate investment properties. Such properties can range anywhere from one single family home all the way up to several apartment buildings.
The responsibilities of a property manager can vary quite a bit and is largely dependent upon the requirements of the real estate investor, and the salary the property manager is being paid. Some of the responsibilities may include any or all of the following:
A property manager may be required to evaluate and set the initial rent for a given property and then make sure that rents are paid by tenants, as well as making periodic adjustments to rents as necessary.
Rent Setting – A knowledgeable property manager is capable of undertaking research to establish a fair rent based on an amount that is attractive enough to be inviting to would-be tenants but also provides the property owner with a fair market return on his or her investment. This is mainly accomplished by comparing rents for similar properties within proximity to the one being managed.
Rent Collecting – A property manager ensures that all tenants pay their rent on a pre-determined date as set out in their contracts, and will charge a late fee if the rent is not paid by the agreed date. Further actions can be the responsibility of a property manager should the tenant default on their rent more than a few days.
Rent Adjustments – From time to time, and as local laws allow, rents can be adjusted to be brought into alignment with current market rates. Typically rent increases are instituted on a yearly basis and rents are raised by a fixed percentage, but on occasion rents can also go down if market rates dictate this as being the correct strategy to ensure properties remain tenanted.
Responsible for Tenancy
Perhaps the most important responsibility of a property manager is maintaining a high level of occupancy. This can involve advertising for new tenants, ensuring current tenants have issues addressed quickly and satisfactorily and taking proper legal steps to remove non-paying tenants.
Finding Tenants – A knowledgeable property manager will know the best way to market to ensure that properties are fully tenanted as much as possible. He or she will know what tenants in the local area are seeking and be able to suggest site improvements that may make the property more attractive to potential tenants.
Screening Tenant Applications – A property manager will go through all the applications of prospective tenants, conduct background, criminal and credit checks to ensure that the applicant is a suitable fit for the property being rented. He or she will have a consistent process to eliminate unsuitable candidates and yet avoid any accusations of discrimination. Based on their years of experience they will have an effective system to ensure that only the best applicants are granted a tenancy. Some factors that they will consider are an applicant’s ability to pay their rent consistently and on time, how long the applicant is likely to maintain their tenancy, how responsible the applicant is likely to be regarding caring for the property and how respectful the applicant is likely to be of other tenants.
Leasing – A property manager is responsible for leasing properties where applicable. This includes determining the length of the lease and the provisions within the lease that will provide the highest level of protection for the property owner. He or she will also calculate a suitable security deposit amount.
Complaints – A property manager deals with all tenant complaints, arranges contractors to undertake necessary repairs whether emergency or less urgent, responds to noise complaints and any other type of complaint raised by a tenant.
Move Outs – When a tenant moves out the property manager will undertake an inspection to ensure that the property has been left in the same condition as when the tenant first moved in. He or she will take note of any damages and determine the repair costs so that deductions can be made to the security deposit. He or she will then arrange for the property to undergo a thorough cleaning in readiness for a new tenant, get any necessary repairs handled and made arrangements for a new tenant to move in.
Evictions – When a tenant defaults on their rent or does something to breach their lease contract the property manager will go through the legal process of arranging their eviction.
Maintenance and Repairs
The physical management falls to the property manager. This includes all maintenance and repairs of the buildings as well as maintenance of any gardens, walkways, lawns, parking structures and more.
Maintenance – A property manager is not only responsible for ensuring the property is kept in the greatest condition possible but also for arranging preventative maintenance to prevent potential repairs. A property manager will have a list of reliable contractors to undertake repairs to plumbing, landscaping, structures as well as conduct inspections to advise of potential deterioration. Tasks such as extermination, trash removal, clearing of pathways and roadways within the complex all fall within the responsibilities of a property manager.
Repairs – Whether it is an emergency situation or one of less urgency a property manager is responsible for ensuring that the repairs are undertaken in the most efficient way, both time-wise and cost-wise. A property manager may choose to make simple repairs him or herself or call upon one of the many reliable contractors they have on their resource list.
Landlord – Tenant Law Knowledge
A good property manager must have a thorough understanding of all the relevant state and national laws associated with landlord – tenant interactions. These include but are not limited to the following:
- How to legally conduct screenings of applicants
- The proper way to process security deposits
- The legal way to end a lease
- How to legally evict a tenant who has breached their contract
- How to maintain the legally required property safety standards
- How to supervise other employees
Employees – A property manager is responsible for ensuring that any other employees for the property are undertaking their responsibilities as required. A property manager may also be responsible for the hiring and firing of these employees, including setting salaries and approving raises where warranted.
Vacant Properties – A property manager may be required to insure vacant properties are kept in good condition, free from acts of vandalism, squatters, and vermin. He or she will also be responsible for managing any contractors undertaking maintenance, repairs or remodeling, as well as ensuring landscaping is kept up.
Keeping Records / Budget
One of the responsibilities of a property manager is ensuring that all costs are contained within the budget and that detailed records are kept of all costs, expenses, purchases, etc. for that property.
Budget Management – Each property that a property manager may be responsible for will have a budgeted allocation of funds available to cover all relevant costs associated with the proper running and management of that property. It is the property manager’s responsibility to adhere to the budget constraints at all times, although when certain emergency situations arise they may choose to take preventative or restorative steps to ensure the safety of the tenants and property without the need to stay within budget. The property manager will assess and make that decision at his or her discretion.
Record Maintenance – A property manager needs to collect, maintain and record all income and expenses about the running, management, and upkeep of the property. Also, records should include item details such as when inspections were carried out when repairs were undertaken, any complaints that may have been received, any defaults on rent payments and any other relevant information that may be required by the property owner.
Taxes – In addition to keeping detailed records to keep the property owner informed it is the property manager’s responsibility to maintain records in such a way that the information can be used to file taxes. He or she may submit the taxes for the property owner, or advise the property owner how to file taxes for the investment property themselves.