The services provided by a property management company are very broad and diverse. Essentially, rental property management services provide all of the necessary functions to keep a property running smoothly, without the direct involvement of the owner. The management company is hired by the owner to perform specific tasks and handle designated responsibilities, as agreed upon in the management contract. The manager acts only as an agent on behalf of the owner, who retains ultimate control and responsibility for the property.
Property managers manage all kinds of rental properties, including houses, apartments, mobile home parks, stores, shopping malls, offices, warehouses, vacation rentals, industrial properties, and storage facilities.
Full Service Property Management
A comprehensive property management service is designed to handle all the day-to-day activities needed to keep a property operating smoothly, as well as provide long-term and strategic advice on how to preserve asset value and maximize return on investment.
Some owners do not require the full range of services offered by a larger management company. It is generally possible to arrange a contract that provides service on an a la carte basis. For example, the owner may wish to handle the responsibilities of maintenance and repair of the property, and designate the manager to handle all other responsibilities.
Property Management Fees
The cost of all rental property management services are specified in a management contract. The fees can take many forms, such as flat monthly fees, percentages of rent collected, or charges on a per-service or as-needed basis. A typical management contract includes all of the above fee structures in some combination.
There is no such thing as a normal or average property management fee. Fee structures vary widely, based on country, location, level of service, type of property, tenant profiles, and condition of the property. In general, fees will be higher if the property is in poor condition or the tenants have low incomes, because of the increased management problems associated with such properties.
As with any service-based industry, the companies that provide the best service often charge the highest fees.
Common Property Management Services
As the following list indicates, a property manager’s duties can have a very wide scope. Full service property management might include all of these services, whereas more limited service might include only a few.
- Market and advertise vacant properties
- Show properties to prospective tenants
- Screen tenant applications to ensure high quality
- Conduct tenant credit and background checks
- Negotiate, sign, and renew leases or rental agreements
- Collect rents when due
- Chase late rents and impose late fees if appropriate
- Track security or performance deposits
- Respond to tenant requests and complaints
- Provide legally required notifications to tenants
- Maintain and repair the physical property
- Arrange contracts for necessary building services
- Purchase building supplies and equipment
- Conduct inspections for safety & maintenance issues
- Co-ordinate with utility providers
- Pay bills as designated by owner
- Pay taxes, mortgages or second mortgages
- Track operating income and expenses
- Provide periodic financial reporting to owner
- Handle problem tenants and initiate evictions
- Ensure compliance with local and national laws
- Contract for capital improvements and renovations
- Advice on asset protection strategies
- Assist with maximizing return on investment
In short, property management service is available for any and every operation involved with taking care of investment properties.
Residential Property Management Services
A residential property manager handles properties having tenants who reside full-time in a dwelling unit located on the property. This can include single-family homes, duplexes, apartment blocks, co-operative housing, condominiums, and mobile home parks.
Residential property management services focus on tenant interaction and building maintenance. In a residential setting, tenant turnover can be quite high since tenants might stay only a few months or less. This necessitates fairly frequent move-ins and move-outs and lease signings. The manager must also arrange for frequent maintenance duties, since tenants are on the property 24 hours a day but are generally not allowed to make their own repairs.
Commercial Property Management Services
A commercial property manager handles properties having tenants who conduct business on the premises but do not live there. This includes properties like office space for rent, retail spaces, industrial facilities, storage units, and shopping centers.
Commercial property management services focus on financial aspects such as advertising and marketing vacancies, lease negotiations, strategic planning, accounting, administrative records, and financial reporting. Day-to-day interactions with tenants are fewer than with residential properties. Most commercial tenants maintain their own premises and pay for their own utility and operating costs, in some cases customizing the interiors of their spaces to meet their own needs.
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