Rental management services combine all the significant and seemingly insignificant tasks in managing rental properties. There are various ways a property owner can process these services, such as property management software, property managers, or a property management agency. They are all necessary to efficiently manage your rental properties regardless of who is delegated to complete these tasks.
Rental management services—or simply property management—is an umbrella term for the various ways property owners manage their properties. It can include the maintenance of finances, utilities, future investments, and the acquisition of revenue from your investments. Though management covers those core aspects, there are multiple methods of management.
Property Management Software
Real estate property management can be accomplished with the help of property management software. Property management software is a program for a computer-based device designed to help property owners or managers manage the day-to-day operations of their properties. Due to the plethora of computing devices on the market, anyone will find property management software or apps on smartphones, tablets, and desktop environments.
Tasks such as collecting rent, scheduling services, and issuing payroll can all be performed within property management software. The great thing about property management software is that its methods can scale in size to whatever suits your needs. For example, you can automate your workflow so that if you need a small staff to manage your property, they won’t be overwhelmed with work.
Often, property owners will manage their own properties. However, if self-managing isn’t sufficient or possible, many property owners will hire property managers for real estate property management. It can be beneficial for property owners to take a backseat when managing their properties; for some, it may even be their only option.
Property owners will generally not participate in the day-to-day operations but rather act as an overseer for their managers. As a result, property owners typically give their managers a fair bit of autonomy to ensure that it is run efficiently.
Property Management Agency
Property owners who don’t have time or the know-how can bypass property managers altogether and pass the buck to somebody else. That someone else can be a property management agency. That is a path for property owners who aren’t very knowledgeable about the real estate market but have a yearning to invest. These agencies exist to manage your property entirely.
Property owners can take a hands-off approach to their business and focus on other ventures. However, it would be a little unnerving for me not to participate in the managing of my properties. I would seriously research an agency’s method, investment returns, and service costs to ease my nerves. I can guarantee that the costs of service will be a sizable expense. Hiring an agency to manage your properties should be your last resort; expect to share your profits with them as well.
Tasks of Rental Management Services
Referrals & Marketing
One of the most important rental management services is referrals and marketing for your properties. Marketing is how rental property owners let potential tenants know their properties exist, and various mediums are available for advertising rental properties to potential tenants.
The internet is a massive sector for rental property discovery. However, print publications are also somewhat popular, as many welcome centers to big cities will have pamphlets that list all of the local rental properties and their amenities. Property owners can do this by purchasing ads in these publications.
Both residential and commercial rental properties need tenants for you to make money. After you have issued your marketing campaign, you wait for potential tenants to walk through your doors. Once potential tenants arrive, your work still needs to be completed. Tenants need to be efficiently evaluated for compatibility while selling them on the prospects of your properties.
Potential tenants can present all kinds of safety and security risks when allowing them to reside on your properties. That’s why background checks are an essential rental management service. Most tenants expect a credit check, questions about income and former living arrangements before they are approved. These types of things will tell you much about your new potential tenant and whether or not they would be a good fit for your property.
Be sure to verify income before you even think of taking in a tenant. A good tenant will take care of the property, report any property issues in a timely manner, and pay the rent on time. All of these things help to keep your rental management running efficiently and place less stress on you.
Once your potential tenants have passed their background checks, it’s time to show them your properties and the amenities they offer. Then, assuming the tenants find a property they are interested in, it’s time for you to perform yet another rental management service.
You can begin discussing the terms of the lease with the tenants and answer any questions they may have. Keep in mind that if you didn’t specify some things in your agreement, then they’re open for interpretation. Tenants need a direct way of knowing what services you’re providing and what responsibilities you have. Tenants often think they know what they can and cannot do with their property—and will proceed along with these ideas unless you tell them otherwise.
Outlining everything in a contract and being as specific as possible is crucial to keeping everyone safe and happy. Knowing your tenants’ rights when it comes to rental management will also help keep your relationship positive. After all of that is complete, all that is left for your tenants to do is sign on the dotted line and wait for you to issue them their keys.
Repairs & Maintenance
Rental management services continue for potential tenants interested in your properties and those who already reside there. Existing tenants will require maintenance in their rented properties. The property owners will have to hire contractors to fulfill the needs of their tenants if their demands are beyond the abilities of the property owner or their immediate staff. These contractors could include electricians, plumbers, carpet cleaners, roofers, or pest control.
Having reliable service providers established for your rental management needs is essential to keeping things running smoothly. Scrambling to find a service provider in the event that something happens to the property—a leak, structural issues, plumbing problems, etc.—is not something you want to be spending your valuable time doing. This keeps you, your tenants, and your property owner assured that you have your business under control and will be on top of tasks in times of need.
Payments, Expenses & Record-Keeping
Rental management service providers collect rent payments from tenants in behalf of the owners. However, property owners also incur expenses from fees to vendors and contractors. There has to be a distinction on who paid for what when these instances arise.
For a variety of reasons, it is important to keep records of every transaction. This keeps you protected in case discrepancies arise with both tenants and property owners. These could be issues about maintenance or repairs, legal issues from current or former tenants, any budget discrepancies, or back rent payments from former tenants. Keep track of what exactly happened during your tenant’s stay and what has been done to the property from move-in to move-out.
One of the most disappointing yet necessary rental management services is eviction. When tenants refuse or cannot pay their rent, the next logical step is to evict them. This process is not pleasurable for any parties involved, but the property owner is operating a business, and the tenants signed an agreement to keep up with their payments. Failing to make payments is a breach of contract, so they are no longer fit to remain in the rental property.
Different Management Styles for Different Property Types
Every residential property differs, so every investor’s property management needs will vary. For example, someone with one to two single-family homes for rent needs something different from someone with 20. Similarly, investors with apartment complexes need to address more issues than someone renting out their single high-end condo unit downtown.
To help you decide what kind of service you need, here are a few main property categories and what you should expect from each.
Detached Single-Family Homes
Most investors start with detached single-family homes- and for a good reason. Many people in the U.S. like living in these homes because they want a little privacy. Those with independent units also like having a yard, even if it’s relatively small.
The challenge that comes from detached single-family homes is maintenance. For example, there are four walls to protect and paint every couple of years. In addition, every home will have its separate HVAC system, gas line, and water heater because nothing is shared with nearby residents. All of these need regular maintenance and replacement.
Not to mention yard maintenance! Small yards still require regular mowing and trimming, and properties with larger yards can quickly become expensive to maintain.
Home property management companies for this category of investments should do three primary tasks:
- Advertise and interview potential tenants
- Work with contractors for maintenance
- Collect rent from the tenant
Again, maintenance is the biggest challenge, which is why most landlords hire rental managers in the first place!
Apartments are a different ball game, as they bring the advantage of scale to the investor. But, unfortunately, a higher number of tenants and units also means you’ll have more issues occurring at any one time.
Property managers for apartments will be working with your tenants daily. It’s also vital for them to cover the front office during the workday, as you never know when potential tenants may show up on the doorstep.
Advertising is essential but not as crucial as with single-family homes. When people go apartment hunting, they generally have a much lower selection to choose from, so there’s a good chance they’ll come over to check out your units on their own.
Maintenance also works differently for large complexes, as they often have an in-house or subcontracted maintenance team. To help them track every request, they may need to use property management software.
Condominiums and Townhomes
Condos and townhouses bring several advantages to the investor and property manager. For one, there generally have fewer maintenance needs, as most of these units will not even have a yard. Condos also don’t have to deal with issues like roof repair or water heater maintenance.
These units are currently gaining popularity, making it easier for investors and property managers to rent out. In addition, many people are tired of having excess space and are starting to move into smaller living spaces to reduce costs. That means your property manager may only need to do a little marketing. Probably the most important thing these property managers must do well is select the perfect tenant.
Condos and townhomes usually carry HOA fees, especially those downtown or in upscale areas. The HOA fee generally makes the unit reasonably expensive, meaning tenants with solid credit and career backgrounds may be the only ones who can afford the rent.
Trailer Parks and Mobile Homes
Last but not least, managing a trailer park is another unique situation. In most cases, the tenants own the homes themselves, but you own the lot and are responsible for things like landscaping and amenities (if there are any.)
Your property manager will need a lot of patience and great people skills with a trailer park setup. Like an apartment complex, tenants will often struggle or even forget to pay the rent on time. In that case, you need someone who can calmly but firmly get the job done.
Rental management services are the actions that keep rental operations alive and well, whether you’re renting out a single home or an entire apartment complex. Some of these actions are difficult because they involve dealing with different personalities. Sometimes, you may need to turn potential tenants away or even remove them from their rented homes.
However, it’s all in the business’s name, and your rental properties’ success will depend directly on the quality of property management. Be sure to select only the best rental management services in your area and use the best tools that can help you manage your investment seamlessly.