Managing an apartment complex is about taking care of not just the building but the tenants and owner, as well. Success in commercial real estate investing can often hinge on smart property management, which can ensure that a seemingly profitable investment doesn’t instead turn into a negative cash-flow mistake. Small investment property of five units or less can often be managed by an investor who is handy, enjoys dealing directly with tenants and has the time to embrace this management role. There is no denying the property management is a job that takes a commitment and certain skills. On the other hand, an investor with larger properties or is looking to continue to build a portfolio and is more interested in examining potential assets would more likely to be interested in hiring an outside management company.
Investors must face the decision whether to hire an outside property management company or self-manage the property. However, proper property management is no easy task. This decision must take into account the size of the property, the investor’s own individual interests, time-management skills, and how they value their time. If a rental property is not managed correctly, it will fall into shambles. Luckily, there are several different ways to manage the property to fit every landlords’ needs. You can be completely hands-on, or you can decide to outsource everything. The management of an apartment building should be efficiently run like any other business. The manager should look to improve the client-tenant living experience while minimizing costs and increasing profit opportunities whenever possible. The physical structure needs to be maintained for the health and safety of the tenants. Your insurance company may also require certain parts of the structure, such as the roof, to meet certain standards, or they will refuse to insure the property.
You could decide to outsource any rental management issues that involve legal matters. You may feel great about managing the finances of the property, the daily maintenance, and tenant complaints, but are very uncomfortable when it comes to legal issues. In this case, you could hire a lawyer to handle any legal issues that arise. This could include drafting your lease agreement so that it complies with all of your state’s landlord-tenant laws and handling all tenant evictions. Management companies deal directly with prospects and tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions. Plus, a good management company brings its know-how and experience to your property, giving you the peace of mind that comes with knowing your investment is in good hands.
For many real estate investors, the specter of using a property manager is like having to visit the dentist. It is one of their least fun things to do. And yet a good property manager can ensure your monthly cash-flow while a poor one will almost drive you to bankruptcy.
So what do property managers do?
1: Help property owners research the local rental market
2. Communicate with tenants
3. Collect rent
4. Finding and screening prospective tenants
5. Deal with complaints
6. Deal with evictions
7. Conducts routine maintenance
8. Manage finances
The obvious way to find those few property managers that really will take care of your portfolio is to find them based on the experience of others. Training in federal, state, and local laws is an important part of managing an apartment complex. Costly mistakes can be made without knowledge of these laws. It is impossible to be an expert at everything. If you had hired an accountant to file your taxes, instead of doing it yourself, the accountant might have caught several deductions that you were not aware of.
If you decide to hire a property management company, use caution in selecting one. Get recommendations from colleagues and your local apartment association. A good property management firm can easily become one of your greatest assets, second only to the properties that they steward on your behalf.