Imagine if you will, you just inherited a small apartment building from your father. You are semi-retired with a little extra time on your hands. So, you don’t mind putting some time and effort into the place. You have some fond memories of helping your parents take care of it when you were a teenager, and you are kind of looking forward to it. However, your wife expressed concerns about you stepping into the property manager role and suggested you look into hiring a management company. You know about the chores involved with a rental property, but you never considered the role of a property manager. What role does a property management company play?
I’ll explain.
What Role Does a Property Management Company Play?
Property managers certainly do a lot, which we cover in a video blog called What Does A Property Management Company Do?, but that really does not get into the vital role they play. In fact, a property management company plays multiple roles supporting a rental property owner.
Roles Property Managers Play
Property managers play several roles that help a rental property owner. Here are some important roles property managers play. Some you probably already know, while others you may have never considered.
Task Manager
Property managers serve as task managers, executing and following up on the many tasks involved with being a landlord. These tasks include filling vacancies, handling moveouts, making units ready for rent, collecting rent, coordinating maintenance, handling violations, overseeing evictions, and handling various miscellaneous tasks as they come up.
Most rental property owners are aware of these tasks, and this is often reason enough to enlist the services of a property manager. However, the other roles managers play may bring even greater benefits.
Protective Barrier
The property management company serves as a protective barrier, acting as a buffer between the property owner and the tenants. This barrier helps shield the property owner from direct contact and may be the biggest benefit of having a property manager.
Tenants need access to a responsible party, but you don’t want them to be able to reach you anytime they wish. Their legitimate need may be at an inconvenient time. You might also want some space to do some research, find facts, or even just think to make up your mind without being put on the spot by your tenant or anyone else, for that matter.
Skilled Facilitator
A property manager serves as a skilled facilitator. They help make things happen quicker and with less effort from the property owner. This includes everything from tenant issues to repairs or even dealing with attorneys or government agencies.
Having a primary point of contact who is familiar with how to handle rental properties simplifies matters and helps get things done. A professional manager can make things like processing tenant applications and drawing up lease documents a lot quicker and easier than if an owner did it themselves. Having a property manager should make things simpler for both tenants and rental property owners.
Business Identity
A property management company attaches a business identity to the housing provider. This makes it way less personal for both parties. When a manager raises the rent, tenants understand that the manager is just doing their job. When the property owner raises the rent directly, it understandably feels a little different.
Rent is the biggest bill most tenants pay each month. When a tenant pays rent directly to the owner, they naturally start to attach a variety of different feelings. When tenants pay a management company, they feel like they are just paying the rent as agreed.
Licensed Representative
A property management company is a licensed representative acting as an agent of the property owner. The manager has a fiduciary relationship to the property owner with the duty to look out for the best interest of the property owner.
In California, a property management company is required to hold a real estate broker’s license, and the property managers are required to hold a real estate license with the California Department of Real Estate, just like an agent who does real estate sales.
Trusted Advisor
A property manager serves as a trusted advisor to the property owner. A professional property manager will have more experience, training, and resources specific to managing property than an individual property owner. \The manager is also closer to the day-to-day activities that go on at the property, putting the manager in the best position to guide and advise the property owner.
The role of advisor has become more important given the higher expectations and legal requirements placed on housing providers. There are more issues and problems today than in the past, making it harder than ever before to go at it alone.
What Does It Mean?
A property management company plays multiple roles, which provide a support system to help a rental property owner. Their assistance reduces the risk and helps take away the headache of owning rental property.
A property manager is just part of a savvy real estate investor’s team. Your team should also include a tax advisor, insurance professional, contractor, real estate broker, and attorney.
Many management companies provide brokerage services, and every good manager should be able to connect you with other quality team members. After all, it is part of their job.
Bottom Line
Property management companies play several roles to support rental property owners.
- Task manager: Property managers oversee and perform tasks, which include filling vacancies, handling moveouts, making units ready for rent, collecting rent, coordinating maintenance, handling violations, overseeing evictions, and handling various miscellaneous tasks as they come up.
- Protective barrier: Property managers serve as a protective barrier, acting as a buffer between the property owner and the tenants or anyone else wanting access to the owner.
- Skilled facilitator: Property managers serve as a skilled facilitator, helping make things happen quicker and with less effort from the property owner.
- Business identity: A property management company attaches a business identity to the housing provider, making it less personal for both landlord and tenant.
- Licensed representative: A property management company is a state-licensed representative acting as an agent with a fiduciary duty to the property owner.
- Trusted advisor: A property manager serves as a trusted advisor offering additional experience, training, resources, and perspective to professionally advise a rental property owner.
Your property manager is just one member of your team, which should also include a tax advisor, insurance professional, contractor, real estate broker, and attorney. Many management companies provide brokerage services, and every good manager should be able to connect you with other quality team members. After all, it is part of their job.
Thank You
Thank you, and we hope that you found this helpful and informative. Remember, we are not attorneys, so we don’t give legal advice. Laws are always changing and vary depending on the specific municipality in which the property is located. For legal advice, please consult a real estate attorney familiar with the laws in your area.
For Real Estate Advice
If you are looking for a reliable property management company to help you handle a rental property or a real estate broker to guide you through the sales process in Long Beach, Los Angeles, or Orange County, California, or if you are just considering it and have a few questions about real estate, contact the Mike Dunfee Group today! We are happy to help.
Dunfee Real Estate Services, Inc. DRE # 02026232
