What Is Property Management? A Comprehensive Guide

Answer-

The term “property management” refers to the daily supervision of residential, commercial, or industrial real estate by a third-party contractor. Property managers essentially function as the intermediary between the rental property owners (landlords) and renters, handling the day-to-day operations and ongoing upkeep of real estate investment properties. 

While property managers work in different ways, based on their contract with the property owner, their main role is to manage tasks that preserve the value of the property while also generating income. A landlord can hire a property management firm to help with one task, such as collecting rent, or they can enlist a property manager to handle all business operations for their property.

What is a property management license?

A property manager will typically need a property management license or real estate broker’s license to have a career in this profession. A property management license allows property managers to work in real estate and perform business-related duties in this profession. The specific licensing requirements will depend on the state in which you live and work. Not only will you likely require a license, but earning one will also give you credibility in your field.

A property management license can be obtained through state governments, local authorities or real estate boards. To obtain a property management license, you’ll need to be at least 18 years of age and have a high school diploma, however, more companies want property managers to have a bachelor’s degree in business, real estate or a related field.

What is a property management firm?

A property management firm is an office where property managers work. Property owners can hire a firm to maintain their properties when they don’t have the time, experience or capability to manage their properties themselves. There are several property management firms throughout the United States offering their real estate assistance.

 

Basic property management responsibilities include:

  1. Pricing property to maximize revenue while minimizing vacancy 
  1. Screening tenants (e.g., running background and credit checks)
  1. Drafting, signing, and renewing lease agreements on behalf of property owners
  1. Collecting rents and security deposits
  1. Managing tenants (e.g., handling complaints, sublease requests, move-outs, and evictions)
  1. Responding to maintenance requests (e.g., water leaks or exterminations)
  1. Creating and adhering to budgets for property maintenance costs (e.g., landscaping and addressing wear and tear)
  1. Marketing rental properties ahead of vacancies to prevent empty units
  1. Understanding state and national landlord-tenant laws and regulations
  1. Advertising rental listings to attract potential tenants
  1. Administering and enforcing leasing agreements

Should I hire a property manager?

As you know by now, a good property manager can have a major impact on the success of your investment. That being said, it’s not always necessary. To evaluate whether or not you should hire a property manager, there are several factors to take into consideration:

 

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Budget

You purchased the investment property to make a profit, so you’ll need to determine whether or not a property manager fits within your budget. Most property management companies charge for the daily upkeep of the property, which is usually a percentage of the overall collected rent. This will be the main payment you make. Other fees you might encounter are start up fees for when you first sign on with a property management company, or leasing fees for when the property manager has to find new tenants for the space.

Time

Ask yourself, “do I realistically have enough time to make this investment property successful?” Keep in mind that property management isn’t a typical 9-to-5 gig. You’ll have to respond to tenant requests outside of regular work hours and on weekends.

Location

It’s a lot easier to go without a property manager if you live near your investment property. If something goes wrong or a tenant has an urgent request, you can drop by in a moment’s notice. However, if you’re based somewhere far away, it can be difficult to keep tabs on your tenants and their needs.

 

 

  1. source- https://www.housing.vic.gov.au/

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