Why hire an outside company to help manage rental properties? For one thing, property management companies are often intimately familiar with the local area. They know the local laws and ordinances that apply to properties and to interactions with tenants, as well as the maintenance issues that are likely to arise. (Think about it: De-icing walkways probably isn’t a concern in Miami, but hurricane-proofing a building is. The opposite is true in Minneapolis.)
The other factor is the hassle involved. Marketing and advertising, vetting tenants, maintenance and repairs…there is an endless list of tasks that need to be done (and done well). Many of these tasks require the landlord to be present at the property at specific scheduled times. According to one survey by a national property management company, landlords spend an average of 47.5 hours per year per property handling the leasing, and 46.6 hours per year per property doing the actual property management.
What exactly is taking up all that time? And do property management companies handle all, or just some, of those activities? What kinds of services do property management companies provide, anyway?
Essential Property Management Services
These questions are a little difficult to answer, because every management company offers a slightly different basket of services. For example, some management companies provide an online portal for landlords and owners to see tenant statements; others do not, handling all accounts internally.
We have found, however, that there is a “core” of services that almost every property management company offers. (Indeed, if a company did not offer one of these services, it would be cause to dig further and find out why it did not):
Tenant screening and background checks. Seasoned landlords will tell you: Most of the mistakes they have made stemmed from not doing their due diligence when it came to screening prospective tenants. A thorough screening should include not only background and credit checks, but employment history, previous rental history, and expected living arrangement (family, pets, etc.).
Preparing units for rent. Units need to be thoroughly cleaned before a new tenant takes possession, and any outstanding maintenance issues need to be addressed. Local ordinances might also require an inspection, especially if the unit has been unrented for a period of time. (In St. Louis County, for example, an occupancy inspection is always required when a new tenant moves in, and again annually if you apply for the Housing Choice Voucher Program.)
Drawing up the leases. Most management companies have a template for leases. These cover all parts of a rental agreement, including rent to be paid, security deposits, maintenance agreements, disclosures (for example, lead paint disclosures), policies on late rent, instructions for moving out, and so on. Leases need to be signed by all parties and are legally binding documents.
Collecting rent and keeping accounts. Management companies will often handle the collection of rent and, if needed, the application of late fees. They will inform a landlord if rent is not being paid, in violation of the lease.
Handling maintenance requests. It is a landlord’s responsibility to keep the property in a safe and livable condition. Part of this is handling all reasonable maintenance requests. These can be simple items, like replacing light bulbs or installing new locks, to larger and more pressing projects, such as fixing a burst pipe, removing pests, or repairing fire damage. These need to be handled in a timely manner, and many require the help of a licensed professional.
Assisting with grounds (snow removal, lawn care, etc.). Not only does a well-maintained exterior help with curb appeal, but it also keeps the property grounds safe, too. This means removing ice and snow in the winter (if those things are typical for your area) and keeping plants well controlled (removing weeds and trimming overhead branches) in the spring and summer.
Compliance with state and local laws. State and local laws will be very specific about all of the above: They will specify when inspections need to happen, how and when maintenance is to be performed, and even what care your grounds will need in order to avoid being labelled a “nuisance” property. A good property management property needs to be up on these ordinances in order to serve you best.
Other Common Property Management Services
In addition to the above, the following services are also pretty typical:
Marketing and advertising. When you have vacant units, how do you get them filled? Where do you advertise? What kind of tenants do you want to attract? It helps to have a professional think about these things. It’s a nice luxury, being able to pick and choose your tenants from a pool of high-quality, responsible prospects!
Property evaluation. It can be hard determining a fair rental rate for your property. Set the rate too high, and your units will sit empty, draining your bank account. Set it too low, and not only will you leave money on the table, but you might not attract the best possible tenants. A good property management company will look at the rents of comparable units in the area, consider upgrades and improvements to your property, determine what the market will bear, and give you a fair rental valuation.
Property inspections. Some management companies offer their own inspections in addition to arranging for inspections from the local government. These management inspections can be useful, both for anticipating code violations so they can be addressed ahead of time and for suggesting improvements that can increase the value (and hence rental income) of a property. For example, would a new coat of paint be helpful? Updated locks? Better landscaping? Sometimes small improvements can pay for themselves in less than a year, given the potential for higher rental rates.
Policy consulting. Should you allow pets? Can you rent to a smoker? What is a reasonable “grace period” for accepting late rent? An experienced property management company has seen all sorts of policy decisions play out and can advise you as to the pros and cons of each.
Online access. With today’s technology, there’s no excuse for not giving landlords and tenants access to their accounts, with up-to-date information. Renters should be able to see how much rent they owe, put in maintenance requests, and generally communicate with the property manager. Landlords should be able to see how much rent they are owed, how much has been disbursed, and how much profit they are making on the property.
Freedom. This isn’t a service, per se. But one of the main reasons people seek out a property management company is to get their freedom back. They can live or travel elsewhere, knowing they do not have to “stay local” in case there is an issue with their property. They can also sleep easier at night, knowing that all maintenance requests will be handled, and all dealings with local departments will be done “by the book.”
Are You Looking for Experienced Property Management in the St. Louis Area?
If you have multiple rental units in the St. Louis area, Select Leasing and Management can help you with the above services. Whether you live in the area or own your properties remotely, we’ll help you maintain your freedom while getting the most out of your investments.
Contact us today to schedule a time to discuss your situation with our professional property managers. We are confident our solutions can help you succeed!