The role of property manager is often underestimated purely and simply because a good property manager will ensure everything runs smoothly. Just because a property investor is great at spotting the next deal does not necessarily mean they are perfect for managing their property portfolio going forward. This is where either an internal or an external property manager comes into play.
The role of a property manager
As we touched on above, the best property managers ensure that your property investments run as smoothly as possible. It is only when you decide to “go it alone” that you will fully appreciate what they have to offer. We will now take a look at some of the responsibilities associated with being a property manager.
Managing rent payments
It is essential that the rent on your property is competitive but maximises your income without prompting significant periods of vacancy. A good property manager will research the area in question and set the rent at the appropriate level. They are also in charge of collecting rent and introducing rental increases where appropriate (many landlords look towards minimum inflation rental increases per annum). If the situation changes in the neighbourhood there may be a need to reduce the rent to maintain a degree of cash flow.
There is no doubt that the greatest challenges for a property manager surround the managing of tenants. This responsibility can be split down into a number of individual activities such as:
• Finding suitable tenants
• Screening tenants using credit checks and references where possible
• Providing a lease which clearly defines the tenant’s rights and obligations while protecting the landlord as much as possible
• Legal obligations such as handling complaints and emergencies are an integral part of a property managers role
• When tenants move out there is a need to ensure all damage is paid for, deadlines are kept and new tenants are provided with a fresh welcoming environment
• Evictions can be both uncomfortable and time-consuming when manoeuvring through the minefield of legal responsibilities
Maintenance and repair
All landlords have a legal obligation to ensure the property they are renting out is in good repair and safe. As a consequence, regular maintenance of gas and electric appliances are an example of extremely important actions which can literally save lives. It is also essential that any repairs are carried out in a timely manner to minimise the risk to tenants and risk to the landlord’s property. While some property managers may be in a position to carry out their own maintenance and repairs, the majority will likely seek third-party assistance.
There are many legal responsibilities for both landlords and tenants when a property is rented out. It is vital that the property manager makes all parties aware of their legal obligations and any changes in the future. Unless legal responsibilities are carried out to the letter of the law it can prove extremely difficult to evict troublesome tenants or even pursue them for rent arrears. If your property manager fails to fulfil their legal responsibilities, leading to potential loss of income, they may well be liable themselves.
It is only as your property portfolio grows that you will fully appreciate the role of a property manager. While some might manage an individual property there are outside parties who can accommodate larger portfolios at competitive rates. It is only when you sit back and consider the actions associated with a property manager that you realise how time-consuming this can be. This is time that property investors can better spend looking for the next deal to increase their long-term wealth.