Property Managers In Real Estate
Investing in real estate is a path to financial freedom, peace of mind, and more time with the people we love. In the initial phases of our real estate journey, we tend to try to hit the ground running by doing it all on our own. If you’re just starting in real estate you may feel as if you have to go in it alone but that’s far from the truth.
Even as physicians, we know that the treatment of our patients is a team effort. We rely on our medical team to help provide care for our patients. From recording patients’ medical history to carrying out treatment plans, our team provides great support when we need it most.
Similarly, real estate investors need the assistance of property managers to help maintain our portfolio of complexes, apartments, houses, or even manufactured housing communities. The right property managers can help protect your investment and also help ensure your passive income actually stays viable for you.
“Who is a property manager you may ask?”
We can put it simply as “a person who manages your investment properties” but property managers are more than that to our success.
I like to describe a property manager as the cruise control of your real estate investing machine. You’re still in the driver’s seat but you’re able to let go of the gas while someone else keeps the throttle going for you. A property manager doesn’t replace you being the owner of your properties but instead helps accelerate you to success.
A property manager’s main duties can be categorized into three main points:
By understanding these three main points we can get a better understanding of how important the right property manager can be for your real estate investments.
Taking Care of The Tenants
An owner-tenant relationship can be a difficult undertaking even for the most seasoned real estate investor. The right property manager will take on all tenant relations such as managing issues, dealing with bad tenants, finding and screening applicants, communicating and enforcing lease terms, and even handling tenant funds.
Tenant complaints will come up in the course of your real estate investment journey and it’s great having the right property managers to handle them. A complaining tenant may be voicing concerns about property maintenance or other community-related issues regarding tenants or neighbors. A property manager will handle the complaint and resolve it based on your guidelines set forth prior to hiring them.
Finding and Screening Tenants
An owner that has a vacant property won’t see any returns so property managers can help to get properties rented as quickly as possible to a qualified tenant. A property manager will help to advertise your property accurately so you get the right tenants. From cutting-edge advertising to communicating with current tenants for qualified referrals, a property manager will help you find and close great tenant leads.
Screenings help sort through a lot of tenants but sometimes a few bad apples may slip through the cracks. Evictions can be a lengthy process and the right property manager will know the correct steps to take to make sure everything is handled appropriately. Not following proper procedure may cause the process to stall which leads to wasted time and money.
Collecting tenant funds is one of the major duties of a property manager and it is up to them to distribute funds to you or your business properly. By having the right property manager, you can rest assured that federal and state requirements regarding trust accounting and tenant security deposits are followed. You will also receive concise monthly reporting that gives you an overall snapshot of the health of your asset.
You may be thinking to yourself “…but can’t I do that myself?” Sure, but do you want to spend your time on that or evaluating other assets you could be acquiring? Also, after acquiring 10’s or even 100’s of properties, you will have your hands full. The goal is to have assets work for you so you can win your time back, not to give yourself another job! It would be wiser to find dependable property managers to handle your properties.
Remember we’re trying to stop the burnout of you doing it all, and help you unlock your full financial potential!
The property you’ve invested in needs to be taken care of on a regular basis. Excellent real estate investments are sometimes within close proximity, but often the best MSAs ( “Metropolitan Statistical Area” are nowhere near you or even on the other side of the country.
Are you up for taking multiple flights per year to check on your properties?
Remember, we’re trying to be smart with our investments, which means being smart with how we manage our time, finances, and effort. This is where reliable property managers can come in to help you keep your properties looking their best, and operating as a well-oiled machine.
Maintenance and Repairs
Your property has to be in great condition for tenants to be interested in renting from you. A property manager will take charge of routine and preventive maintenance for the owner to make sure the property remains in great condition. Maintenance tasks will vary from property to property but the main goal is to always make sure your investment looks attractive to potential tenants.
Repairs need to be made a priority and looked after right away when they are brought up by a tenant. A real estate investor isn’t in the business of fixing a broken pipe or two, they are in the business of finding the next investment. You shouldn’t allow constant repair requests to constrain your time but instead allow a property manager to take control for you. Property managers will coordinate all plumbing, HVAC system repairs, broken railings, common area light bulb replacement, etc. and free up your time to focus on bigger picture items.
From making sure the property is in a rent-ready condition in between lease terms to acquiring new tenants to increase occupancy, a property manager helps manage turn-over. A property manager will enforce move-out dates, and coordinate all turnover in a timely manner to make sure the asset “downtime” is minimized. After all, if the unit is vacant, it’s not generating revenue. A good property manager has a turnover plan they flawlessly execute on your behalf. Turn-over all comes back to tenant relations and maintaining a high standard for your properties.
Does doing all of this on your own seem desirable to you? Don’t you think it would be easier with a property manager?
If you’re still not convinced then let’s keep going to uncover another way a property manager can help you sleep better at night as an owner.
Keeping in touch with the owner and letting them know the state of their property is a vital task for a property manager. By being the owner’s eyes and ears for their properties, a property manager will have a wealth of information to improve the real estate investment. Owners want to be informed about the performance of their investment property on a constant basis.
As the owner of the real estate property, you will want to know how to best serve your tenants and enhance your investment. Property managers can help with informing you about vacancy rates, income, and expenses related to the property, maintenance requirements, business policies, and any legal issues related to the property. You then can work with the property manager to address any issues and exact your value add plan for the asset.
By choosing the right property managers you will be setting yourself up for success in your real estate investments…and sleep well at night!
The Right Property Manager
It goes without saying you want to find the best property management in the market. In my experience, 70% or more of your success, especially in multifamily, depends on your property management company. This is a super important decision to make. Time and effort here will pay off in multiples when you see proformas met and NOI’s (Net operating income) attained!
To give you an idea of how you should choose the right property manager I have created “An Inside Look For the Busy Physician: Top 6 FAQs On Real Estate Investing” ebook. The ebook doesn’t only lay out how to find the right property manager but also an overview of many real estate principles.
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The goal of this ebook is to allow you to gain a broadened perspective on real estate investing and draw closer to your goal of financial independence!
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