From career opportunities, marriages, and deaths causing moves away from rent-worthy properties already owned to just stumbling upon a great investment rental property or actively seeking one for extra income, there are innumerable reasons that people find themselves in the owner-renter relationship. It all looks great on paper, right? So, why do property management companies exist?
Once the owner-rental situation is reality, most owners find that there’s a lot more work involved than just collecting their renter’s money. Property management companies act as a third-party bridge to mitigate the work, pitfalls, and shortcomings involved in owning a rental property so that owner’s really can just sit back and collect their rental income.
How? Let’s take a look at just what property management companies are responsible for doing. Keep in mind that this list is what they should be doing, not what all actually do. It’s important to vet companies offering property management houston carefully to ensure they’re qualified and offering exactly what’s needed.
- Set An Accurate Rental Rate
First and foremost, the property management company should evaluate the exterior and interior of the property.
This gives them a basis to make any improvement/repair/cleanup suggestions based on positive ROI to maximize rental rate. They can also identify ‘selling points’ unique to the property or based on common renter wishes, such as having a lock box and policies on pets and tobacco use.
Another key role here is looking at comparable rental properties and rates in the area to help the owner set a market-based rental rate for the property.
- Marketing The Rental Property
Once price and policy is set, it’s time to rent the property out to a tenant and keep it rented after turnover. Even the best properties need marketing to continually get rented, especially to ideal, high-quality candidates. And, marketing is a huge time and energy endeavor to create, implement, and respond.
Marketing strategy varies, but it should include an array of free and paid platforms like social media, listicles, classifieds, fliers, on-property advertising, MLS, direct mail, and so forth.
Once the strategy is implemented, the property management team should be available 24/7 to field inquiries, provide and collect applications and fees, and ultimately close with qualified candidates.
- Tenant Application Screening
Before closing on an applicant, they must be throughly screened. This is imperative to protect the investment property, the owner, and surrounding residents.
Screenings should include a comprehensive background check to include credit history and criminal background. This will reveal facets like past evictions, unpaid debts, and criminal convictions that factor into a renter’s candidacy.
Of course, such information can only be used in so far as fair housing and discrimination laws allow, which is a very good reason to use a professional management company versed in applicable rental and discrimination laws.
- Turning The Property Over To A Tenant
It’s move-in day for the tenant. A move-in inspection, complete with photo and written documentation, should be completed with the tenant.
The property management company should compose a welcome package for the tenant, including maintenance schedules, basics on facets like garbage collection and mail, details on any amenities, helpful local resources, and contact information for the management company and owner. If the owner offers a move-in gift to new tenants, it should be presented with the welcome package.
Of course, the management company should also draft the property lease and ensure it’s signed before handing the tenant the keys. Any deposits and first and last-month’s rent should be collected at this time.
Collecting monthly rent will continue to be a responsibly of the management company. Management policy should address handling tenants failing to pay, paying late, and needing to be evicted. The management company should handle every aspect of eviction from notice to representing the owner in court proceedings.
The tenant is settled and paying their rent timely, but the housekeeping work of property rental continues.
The management company should ensure that the property remains in good condition and tenants are following lease policies and obligations. Is the tenant smoking on a smoke-free property? Do they have a dog on a pet-free property. Have small repairs, such as missing roof shingles, low-hanging limbs, or leaky faucets, gone unchecked to potentially cause a bigger repair in the future?
It’s such questions that prompt the need for a management company to do routine inspections. They can be done seasonally or yearly, but they definitely need to be done. If and when maintenance needs to be done, the management team should schedule and document it.
Speaking of documentation, this is another role of management companies. They’re responsible for the bookkeeping on the property, including rent accounting, annual tax reporting, paying and documenting insurances, and paying and documenting homeowner fees and expenses.
- Recycle The Property
As tenants move out, the process starts over for the management company. They should make certain the necessary steps, such as repairs, cleaning, and re-keying, are done so that the property can once again be listed and go through the rental steps.