What to Expect From a Real Estate Management Company

by Jennifer Minge

Why should you pay for a property management company? The answer is determined by one word: time. Real estate investors turn to a real estate management company when they are no longer have the time to manage their properties themselves or it is more cost-effective to utilize their time on finding deals instead of fixing toilets. When you reach that point you decide to employ a professional property manager, what do you expect for their services? At a minimum a real estate management company should provide the basic services of filling vacancies, handling repairs, and collecting rent.

Filling Vacancies

Property management companies will be able to analyze market rents in your area to determine the best rental price for your property. If local market conditions dictate the practice, they will notify the property owner if offering concessions is required to attract potential tenants.

Once the price is established, the real estate management company is responsible for advertising your property effectively. Property management companies are able to advertise on different web sites, the local newspaper, regional newspapers like Creative Loafing, and they can maintain professional yard signs. The key to effectively advertising a property is to measure the dollar amounts spent on the advertising and compare it to the pool of potential renters it generates. If an advertising method is not cost effective then the management company should explore other methods.

Property managers are responsible for finding the best qualified tenant for a property. This is accomplished through effective tenant screening. The real estate management company should verify current rental history, determine if there are any judgments, collections or evictions from a previous landlord, and verify current employment. The company should also be able to pull a credit report and conduct a criminal background check.

Handling Repairs

Property management companies should maintain a list of competent and reliable maintenance workers who can handle any maintenance requests from tenants. The company is responsible for scheduling maintenance workers and then verifying the work was completed successfully and within a reasonable cost. The property management company should have established relationships with vendors which allow them to maintain the property at reasonable prices. Maintenance is the true key to a successful relationship among tenants, owners and management.

Collecting Rent

Rents are usually due on the first of the month and you may provide short grace period. If prior arrangements have not been made with the management company, all non-paid rents should be addressed immediately. The company can attempt to contact the tenant through phone calls, emails, letters and property visits. If contact is not made with the tenant then the eviction process should begin immediately. The management company is responsible for timely collection of rents and evicting the non-paying tenants.

Word of mouth referrals are usually the preferred way to find the best real estate management company. Ask fellow property owners for recommendation and then interview these companies. A good property management company can typically keep the units rented at market rents, keep vacancy as low as possible, and handle repairs. Since real estate management companies handle the dirty work, you are given the one item you deserve – time.