What does a property manager do?
Property managers provide a range of services to landlords. Generally, they will do the following:
- Price your rent based on comparable rentals in your area
- Market your property
- Vet tenants
- Protect you from housing discrimination lawsuits
- Handle emergency repairs
- Typically, money is kept in your maintenance reserve fund, which generally ranges from $500 to $1,000
- Create monthly income and expenditure reports to help you track your money
- Provide important tax documents
- 1099s to report their rental income and expenses.
- Perform house visits
- Quarterly or biannually check furnace filters, smoke detectors, and carbon monoxide detectors and ensure the tenants aren’t damaging the unit.
How much do property managers charge?
Most property managers charge one month’s rent to procure a tenant and then charge a monthly management fee, either as a percentage of the rent or a flat fee per unit. Most management fees are 5% to 10% of a month’s rent. Many property managers also charge a lease renewal fee of up to 50% of one month’s rent to cover the paperwork of preparing a new lease and other administrative fees.
Finding a Property Manager:
- Some involve the owner with a lot of decisions and some don’t. Decide which will work best for you.
- Choose a property manager with experience in managing the type of property you own. Check the National Association of Residential Property Managers (NARPM) and the Better Business Bureau. Not all good property managers are members of NARPM.
- Contact five property management companies to start your search. How quickly you receive a reply is a good indicator of the company’s response time with tenants. Response within 24 hours is a good sign.
Questions to Ask a Prospective Property Manager:
- How much do you charge and what services do you provide?
- When there is an emergency from a tenant, how do you respond? Some will hire a third party to deal with these issues, others respond in-house (the latter is preferred).
- How many house visits do you perform every year? Make sure your contract states how many home visits the company will perform annually.
- What is your occupancy rate? Generally, a property management company should have a 92% to 95% occupancy rate. If a company has an occupancy rate below 90% during the summer – that is a red flag.