Property Assessment
The process typically begins with a discovery call to ensure both parties and the property itself are a good fit for property management.
This initial conversation will include topics such as location, rental history, anticipated rent, and management fees among other things.
Moving forward, the property manager and landlord will arrange to meet at the property.
During this meeting, the property manager will inspect the home (indoors and out), ask and answer a variety of questions, including but not limited to fair market value, and elaborate on the tenant selection process.
At the same time, a skilled manager will highlight things about the property that are both positive and that may require attention prior to tenancy.
Management Agreement
When both sides agree to work together, the property manager will draw up a management agreement.
This agreement will (should) spell out all aspects of the owner/manager relationship, including but not limited to fees and the handling of rental payments.
Every property management company likely has a different version of this agreement, therefore landlords are encouraged to ask questions.
Marketing
With an agreement in hand, the property management company will first coordinate any work that may need to be done prior to showings, then begin the quest to find a suitable (and qualified) tenant.
This can be in the form of online marketing, offline marketing, the company’s website and the company’s internal database of tenants.
An effective marketing strategy can yield an ample number of interested tenants assuming the agreed upon rent reflects market value.
As prospective tenants respond to the marketing, the property manager will collect basic information and arrange to show them the property.
Tenant Screening
Tenant screening is an extremely important step in the process, it must be conducted without passion or prejudice.
It is the property manager’s responsibility to collect and verify various information including but not limited to income, references and credit history.
The property manager has a responsibility to the owner to choose the most suitable tenant available, and a responsibility to prospective tenants to explain why they may not qualify, or be a good fit.
It often goes beyond the financial health of a tenant, for example, a family of six despite excess income, strong references and excellent credit simply couldn’t reside in a one bedroom condominium.
An experienced property manager takes the time to properly qualify each prospective tenant.
Lease Agreement
When a tenant has been chosen, a legally binding lease agreement is drawn up.
In most cases, the initial lease term is one year, after which point the tenancy converts to a month to month obligation.
The lease agreement is typically formed between the property management company and the tenant versus the owner and the tenant.
It is done this way intentionally so that the property management company has the necessary ability to deal directly with the tenant on all matters including but not limited to monthly rent collection.
Keep in mind, the property owner has retained the services of a management company because they would prefer to be at arm’s length with their investment.
Property Management
Over the lifetime of a tenancy, a property manager will provide a number of services, such as:
- Ensure tenants produce renters insurance prior to occupancy
- Ensure utilities are in tenants name for move in date
- Collect first and last month’s rent
- Collect monthly rent on time and forward to the owner electronically
- Issue itemized invoices for the owner’s records
- Respond to all tenant requests
- Keep detailed files on tenants
- Issue notices
- Organize and oversee maintenance
- And more…
Property maintenance is among one of the concerns an owner has when deciding if they should rent their property directly.
At any time, something can go wrong on a property:
- A malfunctioning appliance
- An interior water leak
- A fallen tree
- A broken door lock
- A malfunctioning furnace or air conditioner
- A problematic water heater
- A leaking roof
- Etc.
As an owner, possibly not having experience in these areas, or not being aligned with reliable trades people, it can result in undue stress for them, and their tenant.
Conversely, an experienced property management company can respond to such matters quickly, professionally, and at a fair price.
A conscientious manager will also take the time to build a rapport with their tenants helping ensure an honest and open relationship, resulting in a healthier and lasting tenancy.