Many rental property owners that haven’t hired a property manager yet will often wonder how property management works. Thats a good question considering the multitude of tasks that property manager will handle. The actual job description and responsibilities of a property manager can vary from city to city or landlord to landlord. It all depends on the needs to the specific needs of the landlord.
Deciding to rent out a property, whether you’ve made an investment or you just aren’t ready to part with a home, is a big step. It’s a wonderful way to make extra income, start a new career, and it can even be your key to an early retirement.
Unfortunately, for many landlords and property owners, it can also be a huge headache, especially if you’re new to the world of renting properties or you’ve bitten off more than you can chew. For this reason, Bay Area landlords are turning to Oakland property managers more than ever, and they’re finding that it’s the best decisions they’ve ever made.
So how exactly does property management work? There are many myths circulating, so it’s best to learn the truth before making a decision.
What are the roles and responsibilities of a property manager?
The roles and responsibilities of Oakland property managers vary from client to client. It all depends on what the property owner or landlord is looking for.
Do you simply want help dealing with tenants or keeping the financial aspects of your property in order, or are you looking for someone to handle every part of the job?
Your property manager can do as much or as little as you want, from helping you prepare a property to finding tenants to cleaning up once a tenant moves out. Take a look at this detailed list of the typical property manager’s responsibilities:
- Preparing the property: Preparing for rental, including recommendations on repairs and aesthetic changes the property owner should make
- Determining a rental amount: Determine rental amount based on the condition of the property and how it stacks up against other properties in the community
- Advertising the Property: Advertising and marketing the property across multiple outlets to find good tenants
- Tenant Screening: Managing the tenant search process by handling the application process, performing background checks and credit checks, screening tenants, and showing the property to prospective tenants
- Lease Set Up: Setting up leases, helping you decide on issues such as allowing pets, and managing the lease signing process
- Walk Throughs: Performing a walk-through before, during and after a tenant’s rental duration
- Answer Tenant Questions: Answering tenant complaints, questions, and concerns, as well as calls about repairs and emergencies
- Repairs: Making repairs as needed or hiring a third party to do so
- Handling Evictions: Handling evictions using proper protocol for the Oakland area
- Rental Property Laws: Maintaining knowledge of all real estate and rental property laws in Oakland and the state of California so that he or she can be a legal advocate for the property owner or landlord
- Collecting Rent: Collecting rent and security deposits
- Handling Tenant Move Out: Handling the tenant move-out process, from accessing damage and making repairs to determining how much of the security deposit will be returned to the tenant
- Inspections: Conducting property inspections such as move-in, move-out and routine inspections.
- Maintaining Property: Keeping the property clean and well-maintained, as well as performing occasional checks to ensure tenants are not breaking the lease
- Routine Maintenance: Performing routine maintenance such as landscaping, garbage pick-up and pool cleaning as needed
- Managing Employees: Supervising any employees who work at the rental property, such as a receptionist or security guard
- Financial Management: Managing budgetary and financial records for the property
- Legal Help: Assisting or pointing the the landlord or property owner in the right direction with regard to filing taxes or purchasing insurance
- Assisting landlord with other tasks: Assisting the landlord or property owner with any other necessary tasks — the list is endless!
When should you decide to hire a property manager?
Knowing that a property manager can do all of that for you and more, it almost makes sense to hire one in any situation. However, some landlords and property owners find that there are certain times when they have no other choice.
This is especially true for those who are new to renting properties and have no background in property management or real estate themselves. Hiring a property manager can help you learn the ropes while still earning an income. And who knows? One day, you may decide to go at it alone.
But even the most experienced property owners and landlords decide to hire a property manager at some point for any number of reasons.
One example is when you live far away from the property. For example, maybe you inherited a condo building from a late relative. It’s in Oakland, but you live in Los Angeles. You’d like to keep the investment, but you can’t uproot your life to move north right now.
A property manager can do what you can’t when you’re not in town. This means you can live anywhere in the world and still take advantage of a property investment in Oakland.
If you have been growing your portfolio of rental properties and suddenly find yourself with more than you can handle, you can always hire a property manager to handle certain aspects of each property or to completely manage some of the properties.
Landlords and property owners who own apartments and condos may find that it’s easier to hire a property management company to screen and handle tenants for multiple units.
And even if you only own one or two properties that are single-family homes, you may find that you enjoy the extra income but you just don’t like doing the job.
Maybe you don’t have a knack for choosing good tenants or you just hate keeping financial records. Your properties can become passive income when you hire a property manager.
Other reasons for hiring a property manager may include the fact that your time is limited. Maybe you have a day job and several kids, and you don’t have time to do repairs or collect rent.
Maybe you are simply ready to retire and spend more time with your family or traveling the globe. The fact is that there are dozens of reasons why you may choose to hire a property manager, and you should never feel guilty about any of them.
How much do property management companies charge to manage a rental?
One reason landlords and property owners are afraid to hire a property manager is that they are afraid that it’s just going to cost too much. The truth is that it may be far more affordable than you think.
Exact amounts and percentages will vary by location, agency, the type of property, and the amount of work the manager handles for you, but in general, expect to pay about 8 to 12 percent of your rental income, plus any necessary expenses.
Some companies will charge a flat fee that may or may not be a better deal. The best thing to do is to check with several property management companies in the Oakland area and ask for quotes. Just be aware of any fine print.
Also, keep in mind that some property managers may charge fees for specific aspects of the job. Some of these include fees for finding tenants, for managing vacant rental properties, for having to serve an eviction, and for allowing you the use of their maintenance crews.
Again, this varies by property management company, so ask up front before hiring someone to handle your rental property.
How do you become a property manager?
Another thing that is important to consider before hiring a property manager is the person’s credentials. That’s why it’s essential to know what it takes to be a property manager.
In the state of California, property managers must have a real estate broker’s license or work under someone who does. This helps ensure that only qualified people are handling your properties.
Most property managers start out at entry level positions before working their way up through a company or eventually branching out on their own. Some may have bachelor’s degrees in subjects like real estate or finance, though this is not necessary. In many cases, the property manager has some type of real estate background, such as working as an agent.
Some of the requirements to become a property manager can’t be taught in school. He or she must be a good communicator. That means they have the ability to keep in touch with clients about what’s going on with tenants and the rental property, as well as the ability to communicate with tenants themselves, even in tough situations. Customer service should always be a top priority.
Negotiation skills are also important, whether they are negotiating a lease with a tenant or a contract with a plumber to come work on the property. Organization skills are a must. There are so many aspects of the rental business that must be managed at all times that only a person who is properly organized can do a good job.