Have you ever wondered what property management is? Do you want to know if you can benefit from professional property management? If so, you’ve come to the right place. In this guide, we explore –
- What is property management?
- Who needs property management?
- Benefits of property management
- What to look for when choosing a property manager?
- Services you can expect from a professional property management company
Let’s dive right in.
Definition of “property management”
Property management is defined as the day to day management of residential, commercial and industrial properties by a specialized third party. It is a process through which a property is overseen, kept up and promoted for rent/use by an experienced property manager.
Many building owners who have multiple properties choose to avail the services of a professional property management company. Here, the company works in collaboration with the owner to identify their short term and long term property goals and helps the owner fulfill them.
- Common short/long term property management goals include –
- Reducing overheads and maintenance costs.
- Increasing property’s revenue generation capacity and profitability.
- Driving up occupancy rates and reducing long term vacancies.
- Generating positive guest/tenant feedback.
- Driving up the sale value of the property for the future with the correct upkeep.
What is property management for residential properties?
Property management for residential properties refers to services offered by property management companies to oversee the upkeep and rental performance of residential buildings. Here, the property manager exclusively works with clients who own buildings that will be used for residential purposes. These residences could be anywhere, from mountainside to beach-side.
Take Haustay for example. Our property vacation rental property management company is based in Carlsbad, California. We have immense experience helping owners with residential properties in Oceanside, Carlsbad, Solana Beach and Encinitas.
When would you require property management services?
So far, we have explored what is property management in general and what is residential property management. But why would you require residential property management services?
You own multiple properties
If you own more than one property, you may find that it is less expensive to have a property that you don’t regularly use. Instead of keeping the property vacant, but still running expensive utilities, you can hand over the reigns of the property to a property manager. They will get tenants for your vacant property and ensure you earn money on it.
You don’t have the time or resources to proactively manage your property
You have a property that you want to monetize. But, you can’t afford to spend hours each day managing the upkeep of the building, putting up the listing, finding tenants and managing them. A property management company will have dedicated teams that can help you with daily care and tenant management needs. You only need to purchase the services and the property management company will do the rest.
You wish to make use of your property optimally
You have a property that you can give on rent either for short term vacation use or for long term tenancy. But you need the advice of qualified property managers who know how to create the right aesthetic and functionalities for the building to generate the highest occupancy rates. In such an instance, property management can help you optimize your building for success.
You want a smart way to monetize from your real estate investments
You are a property owner who is already renting out your building for residential use. But you are not sure about the psychological profile of your renters, your property’s rental performance and current market rental trends. An experienced property management company will have access to various tools that can measure your property’s performance and give you a detailed report to use to make further decisions. Plus, property managers keep an eye on upcoming rental and real estate trends, allowing owners to know industry changes in advance and take decisions to smartly monetize their properties.
Advantages of professional property management
Now that you know when you may need property management, let’s explore how it can benefit you.
Property management helps you find the right tenants/renters
The right tenant is someone who’s rental expectations match what you intend to offer. For example, your property is meant to be a family home and designed for tenants with children who may be looking for a child-friendly residence. It may be incompatible for students who may be looking for a budget-friendly room to stay in. Property management experts can work with you to understand your needs and find tenants who match your requirements and expectations.
You don’t have to bear the pressures of managing your property every day
Managing a property can be stressful even when you live in it every day. But when it comes to vacation rentals and long term tenancy rentals, the complexity rises tremendously. Not only is there more daily maintenance involved, but you also have to meet more stringent compliance requirements. Property managers can take over these day to day tasks and reduce any stress, risk and pressure you may otherwise experience by managing the property on your own.
You can receive your rent on time, every time
Rent collection is probably one of the most stressful and time consuming activities that property owners need to do. One way to make it seamless is to hire a property management company to take over rent collection for you. Your property manager will contact your tenants, manage payment schedules, recover any rental arrears and handle any refunds, if any. You only need to share your bank details with your team to receive your payment on time, but without facing the hassle of rent collection.
Your property won’t generate too many expenses
When you allow a property management company to oversee your building, you get the services of experts who know how to reduce overheads, while maximizing profits. Your property management team will know where to source quality, low-cost maintenance services. They will find utility suppliers with flexible plans. Plus, they will know how to attract a steady stream of clients to ensure your property does not have extended periods of vacancy.
You can reduce tenant attrition
Since property management companies work with multiple property owners and diverse tenant/renter groups, they are acutely aware about what makes each tenant tick. They will be able to implement the steps needed to make your tenant feel welcome and can reduce attrition/turnover.
Evictions will be easier to handle
On the flip side, if you don’t want a specific tenant living in your property anymore or you receive complaints from your neighbor, your property management team can help you evict the individual. Your property manager will be well versed in rental and eviction laws in your state and can help carefully and sensitively handle evictions if necessary.
It’s easier to meet building compliance requirements
As a homeowner, you may not know what specific building regulations, safety certifications and health/environmental inspections you need to implement for your rental property. Not doing what is legally mandated may get you in trouble with the authorities. Property management companies will have in-depth knowledge about the local and federal building laws. They will be able to advise you on the changes you need to make and help you reduce the risks involved in managing the property.
You get access to insights-rich rental reports about your property
Most property management companies offer detailed reports about the property’s monthly, quarterly, half yearly or annual performance. You may also receive guest/renter feedback, suggestions for improvement and recommendations to optimize future rental experiences. These reports can help you tremendously in any property renovation/upgrade decisions. Plus, property managers also include upcoming real estate and rental property trends in your report, which you can use to decide how to expand your rental property portfolio with a planned acquisition.
Are there any disadvantages with hiring property management experts?
Property management offers so many benefits to owners. But when it comes to disadvantages of property management, you may find professional property management is not right for you if –
- You enjoy meeting prospective renters/tenants personally and don’t want the property manager to liaise for you.
- You want to be more actively involved in day to day property management and decision making.
- You intend to use the property for personal use more often than renting it out and property management doesn’t make financial sense.
- You plan on selling the property soon and don’t require the property to be on rent for long.
But despite these reasons, professional property management affords greater freedom and financial opportunity for property owners. If you intend to retain your property, improve building maintenance, reduce expenses and monetize from it, then hiring a professional property management company can be really helpful.
Qualities of a good property manager
As discussed previously, the main person who acts as a liaison between the client (i.e., you) and the other parties (tenant, service providers, government etc.) is the property manager. Now that we know what property management is, let’s understand who a property manager is.
A property manager is a specialist who has immense experience overseeing the start-to-finish management of a property. This includes everything from helping owners plan their property rental goals to handling tenancy relations to helping owners exit from the property management contract.
When it comes to selecting a property manager, it’s important to explore what qualities your property manager should ideally possess. These qualities will help them discharge their duties responsibly towards you:
- Relevant experience in residential property management
- Professionalism when managing owners, tenants and third party service providers
- Patience to keep marketing the listing and promoting it wherever possible.
- Creativity and ingenuity in drawing more tenants.
- Assertiveness in collecting rents, managing third party contracts and helping the owner meet their goals.
- Excellent communication skills.
- Strong negotiation skills.
- People management skills.
- Tech-savviness and reporting skills.
- Flexibility in schedule and willingness to work beyond the traditional 9-5 job.
Roles and responsibilities of a property management company
Once you find your ideal property manager, it’s time to sign the contract with the company. You can now let the property management company take over the day to day upkeep and promotion of your property.
So, what can your property managers and property management company help you with? Here is a list of common roles and responsibilities you can expect from your property management provider –
Listing your property on rental platforms
Your property management company will write up the listing for your rental property and list it on various rental sites. If they have their own site, they will list it on their website too, for renters to find.
Marketing your listing across various channels
The property management company can advertise your property to the right people, on the right platform and at the right time. They can maximize visibility and reach for your property with smart marketing techniques.
Hiring third party service providers to help with day to day upkeep
Your property manager will liaise with security personnel, payment management companies, utilities providers, housekeeping staff, gardeners, caterers, chauffeurs etc. to ensure your tenants get premium-quality support at all times. Plus, they will negotiate contracts that keep your liabilities and overheads to a minimum.
Vetting tenant/rental applications and selecting the correct tenant
The property management company will evaluate all rental applications and conduct various interviews and property walkthroughs to ensure they find the right tenant for you. They communicate with your renters regularly to identify any issues and take action before it affects your property’s reputation.
Setting rental prices and handling payment
Your property manager will evaluate the current market rental rates for properties similar to yours. Then, they will price the rental fees that your guests need to pay and keep adjusting it according to shifting market performance. They will also take the responsibility of collecting rents, handling late payments arrears, processing refunds and administering any penalties for property damage. They will also oversee performance of your online rent payment system to ensure complete financial security and privacy.
Managing tenant behavior and neighborhood relations
The property management company will be the point of contact for your tenants and any neighbors your property may have. They will handle any issues that may crop up with your rental property ensuring you aren’t bothered with day to day tenant and neighborhood issues. Additionally, they will monitor your tenants to identify and prevent any rental scams and potential illegal activities that may get you into trouble with the law.
Property inspections, safety checks and compliance adherence
Your property management company will conduct all the inspections & acquire all the certifications you may need to continue offering rental services in your locality. They will keep you updated about any physical changes you may need to make on your property, to ensure it meets all safety and environmental regulations.
Monitoring property rental/occupancy performance
Your property manager will closely track the performance of your residential rental property. They will implement any promotional changes or day to day administrative changes necessary that can increase your occupancy rates. They will track which platforms your tenants and prospects found your listing on and will redouble efforts on high performing channels. The property management company will actively work with tenants to find out how best they can improve guest/renter experience and ensure your property offers the best value for the tenants’ rent.
Choose Haustay for robust vacation rental property management in San Diego
At Haustay, we are a highly experienced team of vacation property management specialists. We have worked with residential property owners in San Diego, helping them make their properties more profitable. Now that you know what is property management, speak to us today to see how our expertise can help your property thrive in this competitive rental market.
