What is property management? Property management plays a crucial role for HOAs and condos. It involves ensuring properties are well maintained, compliant with legal standards, and safe for those residing there.
To find out more about property management, its main responsibilities, types, benefits, and if you should hire one, keep reading the article below.
What is property management?
Property management involves overseeing and managing commercial, industrial, and residential real estate properties on behalf of the owner. It is concerned with the property’s daily operations, such as handling maintenance requests, security, and rent collection.
The extent of their responsibilities depends on the contract with their landlord, which is typically commercial property owners, HOAs, educational institutions, and shopping centers. Property management is especially useful if you have many rental properties and don’t have the time to manage them independently.
What does property management do?
As pointed out before, the duties of a property management service depend on the contract between the landlord and can include any task related to leasing and managing rental properties. Usually, these tasks involve the following:
Maintenance
Maintaining a property is a crucial part of property management. It ensures the property is safe, functional, and attractive to tenants. This includes routinely maintaining the property, cleaning common areas, maintaining heating and ventilation systems, taking pest control measures, and checking safety equipment.
Additionally, regular inspections should be scheduled to identify potential issues before they cause safety hazards. If there are any maintenance issues, the property management should repair them promptly and provide tenants with an easy way to report them.
Screening tenants and conflict resolution
Part of the reason why maintaining an aesthetically pleasing property is important is to attract potential tenants. Property managers can do this by marketing vacancies through online listings, social media, local advertisements, and real estate networks.
Property management is responsible for finding suitable tenants, conducting a background check and ensuring their compliance with their drafted lease agreements. They also collect rent, keep lease records, and manage lease renewals and terminations.
Financial management
Overseeing a property’s finances can also be part of a property management’s responsibility. This involves creating the property’s budget, providing regular finance reports, and setting the rental rate for the property based on its location and the current market.
Legal compliance
Property management will ensure that every activity in your property complies with every law and regulation. They also need to adhere to safety and health codes and stay updated on landlord-tenant laws to understand lease agreements, evictions, and tenant rights.
Additionally, property management has to ensure that the property complies with building codes, zoning laws, and environmental regulations. If these legal requirements are not complied, there could be fines, lawsuits, and damage to the property owner’s reputation.
What is a property manager?
A property manager is an individual or entity who provides a solution to landlords who do not live close to their rental property or do not have the resources or time to handle it themselves. They should constantly communicate with the property owner about the status of the property and ensure that its issues are being dealt with.
Although property managers are not required to have a specific educational background, they should have a thorough knowledge of the local property market. However, some states require property management licensing requirements that are important to check before signing a contract.
A series of fees might be included once hiring a property manager. These include an initial account setup fee, monthly management fee, tenant placement fee, maintenance fee, eviction fee, and early termination of property manager contract fee.
Types of property management
Property management is a broad field that comprises the upkeep of several types of properties. A certain level of expertise and knowledge is required for each type of property. There are four types of property management: residential, commercial, industrial, and special purpose.
Residential property management
Residential property management oversees and operates residential properties on behalf of property owners. These can include single-family homes, condominiums, multi-family homes, apartments, townhouses, vacation homes, mobile homes, lofts, and cooperative housing (co-ops).
The property manager’s key responsibility for residential properties is to ensure their profitability. They do this by screening and selecting suitable tenants, handling lease agreements and terms, collecting rent payments, and ensuring a good relationship between the landlord and the tenant.
Property management is also responsible for maintenance, such as overseeing regular tasks like landscaping and cleaning and dealing with emergencies like electrical failures and plumbing issues.
Additionally, budgeting, financial reporting and rent collection are also taken care of by residential property managers. They will track income and expenses, manage costs, and provide financial statements.
Commercial property management
Commercial property management administers and oversees commercial properties such as hotels, office buildings, malls, restaurants, and retail spaces. Most often, commercial property managers work with tenants who rent the space long-term.
Its main responsibility is lease management, including negotiating lease agreements and renewals, enforcing lease provisions, and ensuring its terms are favorable for both parties.
Maintenance management is also vital for commercial property management. They have to guarantee that the property is well maintained and meets safety and regulatory standards. Additionally, they must comply with legal and regulatory requirements, making sure they are informed about zoning laws, building codes, and other legal obligations.
Industrial property management
Industrial property management involves the operation of industrial properties such as manufacturing facilities, warehouses, and distribution facilities.
This type of management is unique because it requires following strict building regulations and complying with local laws. Since most industrial complexes deal with production and manufacturing, if one part of the process is hindered, it can cost thousands or even millions of dollars.
Apart from handling leases, financial management, tenants, and maintenance, industrial property management also focuses on operational efficiency. Property managers work towards optimizing the space, streamlining workflows, and working with tenants to find opportunities to reduce costs.
Special purpose property management
Special purpose property management is for properties that don’t fit in the categories above and have a unique specific purpose that can’t be easily converted into other functions. This includes schools and universities, sports arenas, theaters, religious buildings, resorts, and other specialized properties.
Because of their specific use, it’s vital that property managers understand and stay up-to-date with industry-specific regulations so the property complies with safety, accessibility, and functionality standards.
Also, maintenance of special purpose properties is also a key responsibility of this type of property. HOAs, for example, have to ensure areas such as pools, parks, and gyms are well-maintained and safe for residents.
Benefits of property management
Hiring a property manager can have several benefits and add great value to your rental property. Here are some of its key advantages:
Tenant management
Screening tenants can be a difficult process, and if you don’t have much experience in the real estate industry, there is a risk you will end up with a bad tenant. Property managers will conduct a detailed background check on each tenant, reducing the risk of defaults and evictions. Moreover, they will ensure that all legal requirements are met.
Enhanced rent collection
Property managers will collect rent on time and follow up on late payments. They will also have to deal with tenants’ excuses and guarantee that they will follow the lease clauses, as well as handle evictions if necessary.
Professional maintenance and repairs
Regular inspections are conducted to avoid maintenance issues before they escalate. Well-maintained properties attract tenants and increase property value. Property managers will ensure your property is maintained well, as they can access a network of trusted contractors and service providers.
Legal compliance
Property managers have a lot of legal knowledge that can protect you from potential lawsuits or legal issues. They stay updated on local, state, and federal regulations, ensuring the property complies with all laws.
Effective marketing
In order to attract more tenants, property managers use a wide array of channels and strategies to market vacancies. Therefore, by filling vacancies quickly, they will minimize the time the property is unoccupied, maximizing rental income.
Time and stress savings
Because the property manager is handling the property’s day-to-day operations, you won’t have to worry about time-consuming tasks such as maintenance issues and finding contractors. You will have more time to focus on other tasks. Additionally, you won’t have to handle problems with tenants, evictions, and chasing down rents.
Do I need Property management?
When considering whether or not to hire a property manager, it is important to determine if it will cost you more not to hire one. Landlords with one or two rental units might find it easy to handle their job alone, even providing them with more knowledge on the field. However, if they are dealing with a lot of units, it will be difficult to handle everything on their own.
If you have decided you need property management, you will have to create a list of duties you want them to do on your behalf. When looking for a property manager, it’s important to check their certifications, experience and proximity to the property. Watch the video below to learn more about it.
What is property management software
To help manage and operate your property, property management software can help you streamline the operations and aspects of your property. Vinteum Software offers a range of features to help you handle tenant management, maintenance, financials, and communication tasks.
With Vinteum, you can highlight your communication abilities and save time with features like reports and website builders. Instead of having many tools to manage everyday tasks, you can manage everything in one easy-to-use platform.
Wrapping up on property management
As your property portfolio increases, property management can help relieve the burden of handling the everyday operations of your properties. They will deal with maintenance, tenants, finances, marketing, and any property-related task you can think of.
If you are wondering about the difference between a property manager and a community association manager, check out the infographic below.
