Entrepreneurs often wonder how property management works. What services do property management companies offer? How do they fill vacancies and manage rent payments? This article will explore the basics of how a typical property management company operates.
What Are Property Management Companies?
Property management companies are businesses that provide a range of services to landlords and tenants. These services can include advertising vacancies, screening tenants, collecting rent, managing maintenance requests, and handling evictions. Some property management companies also offer additional services such as property upkeep and financial reporting.
Landlords typically hire property management companies to handle all or most of the day-to-day tasks associated with renting out their properties. This can free up the landlord’s time so that he or she can focus on other business ventures. Tenants also benefit from the services of a property management company. For example, if there is a maintenance issue, the tenant can simply contact the property management company instead of having to track down the landlord.
What Do Property Management Companies Do?
The specific services offered by property management companies vary, but most companies perform the following tasks.
Property management companies typically handle all aspects of advertising and finding tenants for a rental property. This can include placing ads, showing the property to prospective tenants, and conducting background and credit checks.
After receiving applications from interested tenants, property management companies will often screen them to make sure they are qualified. This process usually includes checking the applicant’s credit score, employment history, and rental history. The property management company will also verify that the applicant has the financial resources to pay rent.
Property management companies typically charge a percentage of the monthly rent as their fee. This fee can vary depending on the services offered, the size of the property, and the location. They also charge other fees including, but not limited to, application fees, late payment fees, and pet fees.
Property management companies will also help landlords set the rent for their rental property. They will take into account the current market value of similar properties in the area to come up with a competitive price. They are also in charge of setting any rent increases.
Once the rent is set, the property management company will collect it from the tenants on behalf of the landlord. This can be done through online portals, direct deposit, or paper checks. The property management company will also handle any late payments or bounced checks.
Property management companies act as a buffer between landlords and tenants. They will handle any complaints that tenants have about the property, such as maintenance issues or noisy neighbors. They will also investigate any complaints that landlords have about their tenants.
Property management companies are also responsible for managing any maintenance or repair requests from tenants. This can include arranging for repairs to be made, scheduling inspections, and coordinating with contractors.
In some cases, property management companies may also handle evictions. This process can be complicated and time-consuming, so it is often best left to professionals. There is also a lot of legal paperwork involved in an eviction, which the property management company will take care of.
Some property management companies also offer services to keep the rental property in good condition. This can include landscaping, snow removal, and cleaning common areas. This also includes repairs to the property itself, such as fixing a broken window or repairing a leaky roof.
Property management companies offer a wide range of services to landlords and tenants. These services can make it easier for landlords to rent out their property and for tenants to find a place to live. If you are considering starting a property management company, hopefully, this article has given you a better understanding of how it works.