Real estate investment is often touted as one of the smartest, most reliable tools for building financial savings and bulwarking your long-term income. But as the average new investment owner quickly discovers, managing a property is also a lot of work.
After all, as a landlord, you’re on the hook for a huge range of financial, legal, and logistical responsibilities. Leaky pipes in the crawlspace? That’s your job. Filling a vacant unit after a move-out? That’s on you, too. Did the city implement new zoning codes? You better be on top of it, or risk falling afoul of the law.
Property managers exist to take all this hassle and stress off your hands. They’re down in the management trenches, so you don’t have to be. So if you’re asking “What do property managers do?” a better question might be: “What don’t they do?” Here are seven key responsibilities that management services handle.
1. Setting your rent
Figuring out exactly how much monthly rent to charge a new tenant is one part science, one part art. It requires a good statistical analysis of similar properties in the surrounding area, how the neighborhood is changing, projected costs of maintaining the property, etc. Ask for too much and you might have trouble filling the unit. Ask for too little and you could end up losing money on the deal.
A management firm will help you do this. Their experience managing many similar rentals will give them a strong, well-informed basis for choosing a realistic monthly rent. And because they keep a percentage of your total rental income, the property manager has a financial incentive to work with you in setting that rent as high as realistically possible.
2. Collecting rent
Rent collection is perhaps the most basic and well-known task that managers are responsible for. It’s the property manager’s responsibility to collect monthly rent from your residents in whatever form those payments are made – check, money order, online, etc. – and pass it on to you. If residents are behind on rent payments, it’s the manager who will enforce late fees.
Many managers will hold back a month’s rent as a “reserve” that they’ll use for repairs and maintenance. The best management services – like Great Jones – pass tenant payments on directly to you, the very same month they receive it.
3. Tenant screening
For many owners, finding the right tenants is one of the trickiest and most nerve-wracking tasks. And of course, the stakes are very high. One problem tenant can do tens of thousands of dollars worth of damage to your property, potentially wiping out your entire year’s income. And though you might think your ‘gut instinct’ for potential tenants is reliable, a top-notch property manager will bring much better tools to the job – namely, data.
When Great Jones screens prospective tenants, we run a rigorous background check that includes their criminal record, their credit history, prior landlord debt, and so on. It all gets folded into our algorithmic, data-driven method of locating the very best tenants for your property. That’s why, to date, residents placed by Great Jones have an astonishing 0% rent delinquency rate and <1% eviction rate. Ultimately, investing more time and effort in tenant screening upfront is worth the cost. When you find a good tenant that stays with you for years, it pays for itself many times over.
4. Repairs and maintenance
For the average landlord / owner, keeping up with maintenance is like treading water. For every major task like leaf and litter cleanup, snow removal, and gym and pool upkeep, there are a dozen other nuisance calls – think leaky pipes, drywall patches, broken locks, etc. A good property manager stays on top of these tasks, so the owner can stay out of the weeds, enjoy their life or even focus more time on growing their portfolio.
But it’s not just a matter of logistics. The best managers deliver repairs and maintenance services at a much lower cost than what you’d pay as a retail customer. Great Jones, for instance, has a network of high-quality, fully insured and licensed professionals that we call on to service your properties. We’ve pre-negotiated deeply discounted rates with these professionals, so you’re getting above average work done at up to 30% below retail pricing.
5. Perform regular home inspections
The on-site inspection is crucial to keeping your property in excellent condition. After all, you don’t want to sit back and wait until a tenant alerts you to an issue. If at all possible, you want to do proactive maintenance and catch problems before they’re problems. That’s what the periodic house inspections for. It’s also a great opportunity to check on HVAC filters, carbon monoxide detectors, and smoke alarms, and to make sure that no serious damage has been done to the property.
Many managers conduct home inspections every three to six months, depending on the tenure of the resident, and it’s typical for them to charge a $200 fee per evaluation. Great Jones never charges for on-site inspections. We’re not interested in nickel-and-diming you. That’s why we offer a crystal-clear fee structure with no hidden fees – ever.
6. Emergency services
Property management is a 24/7 responsibility. If a tenant’s refrigerator breaks down or a pipe bursts, the situation has to be fixed immediately – it doesn’t matter whether you’re in Hawaii on vacation, or just sitting down with your family for Christmas dinner. Anything less than a prompt response could compromise your investment, your tenant relationships, and your good standing with the law.
Property managers take this burden off your shoulders by serving as the front-line response for emergency service calls. With Great Jones, tenants can get 24/7 service via email, phone, etc. We also follow up after these events (and all service calls) by doing an on-site walkthrough to ensure service quality first-hand, and by giving residents the chance to rate their service professionals. This is how we ensure our fleet of vendors is nothing less than speedy, thorough, and polite.
7. Handle move-outs
When a resident’s lease comes to an end, their rental unit has to be inspected, checked for damage, fully cleaned, and prepared for a new resident. This is an often-forgotten task that property managers are frequently responsible for.
A thorough evaluation is critical, because it can expose certain kinds of damage that might not otherwise surface until the next resident’s lease is signed. Catching issues early means that necessary repairs can be deducted from the departing tenant’s security deposit, so you aren’t stuck paying these costs out of pocket.
As we said above, managing a property is hard work. And if you have to manage your property manager, it can make your life even harder. That’s why, if you’re considering hiring a property management service, it’s crucial to choose someone you can trust.
At Great Jones, our team includes many former and current investment property owners. We know the stress and anxiety of trying to safeguard your investment, and we’re here to make it better. That’s why we pledge to treat your property like it’s our own – whether you own a few single-family homes or a multi-unit apartment complex. Read more about what it’s like to work with us.