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What is Rental Property Management?
Rental property management refers to managing residential or commercial real estate. Property managers work for property management companies to manage and rent out real estate owners' properties. Residential properties range from furnished to unfurnished, urban to rural and apartments to houses. Commercial rental property management may involve managing either office space or industrial warehouses.
Companies that manage rental properties for owners charge the owner a management fee. In most cases, the fee is a percentage of the rental income received by the owner. Property owners decide to work with property managers if they are able to make a good profit on their rental investment. By hiring a rental property manager, the owner may live in another city or country and receive rental payments. Many rental property managers also help clients find rental properties to invest in.
Property managers send monthly rental payments to owners along with accounting statements and other records that pertain to the rental property. The rental property management company's fee usually includes checking tenant's references, collecting rent, maintenance and repairs of the property and inspections of rental units along with the accounting and reporting services provided to the owner. A property management company may charge the owner for advertising costs associated with rental properties.
Property management companies may advertise the properties for rent online or in print publications. The ad may include photographs of the interior or exterior of the rental. If the owner is paying extra for the advertising of his or her rental property, the property manager must get the owner's approval for the advertising before billing the owner for it. If the property rental is being newly constructed, the property management company supervises construction leases and gets owners' approvals as the project progresses.
Rental property managers must follow state and federal laws for renting out homes and offices. Property managers aren't employed by owners, rather they are considered an agent. In many states, property managers are real estate agents or brokers, which means they are licensed to work in real estate. In some states, a property manager doesn't have to have a real estate license.
Property management software is used by many rental property companies today. The software may help save property managers time and increase their productivity because it can track rents paid and other information on many different properties at once. Most rental property management software is also convenient for tenants as it allows them to make their rent payments online.
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![Rental property managers should stay on top of needed repairs.]()
By: Sergey MostovoyRental property managers should stay on top of needed repairs. -
![Rental property management includes handling leasing matters related to residential and commercial tenants.]()
By: andiafaithRental property management includes handling leasing matters related to residential and commercial tenants. -
![Rental property managers advertise properties for rent online or in print publications.]()
By: Andy DeanRental property managers advertise properties for rent online or in print publications. -
![Rental property managers may repair issues that come up for tenants.]()
By: lightwavemediaRental property managers may repair issues that come up for tenants. -
![If the property rental is being newly constructed, the property rental company supervises construction leases and gets owners' approvals as the project progresses.]()
By: Gina SandersIf the property rental is being newly constructed, the property rental company supervises construction leases and gets owners' approvals as the project progresses.
Discussion Comments
@Logicfest -- I think you've forgotten about economies of scale. The multistate property management company that handles hundreds or thousands of properties may be able to charge smaller fees to the property owners. That means more profits for property owners.
Of course, that is only true if the property management company has an outstanding working knowledge of all the states where the company does business. Becoming familiar with all of those various laws is very possible.
@Terrificli -- That is precisely why it is often the best idea to get a rental property manager that is located in state. The laws are different from state to state, and a local property management worth his or her salt will know what those laws are.
In your broken door example, the laws in one state may say that the landlord must fix that door while the laws in another might not force the property owner to make that repair.
As harsh as it may seem, the property managers job is often to follow the law and nothing more. If you don't know what the law is, how can you follow it?
One of the most important things a rental manager can do is determine just how much service renters are entitled to. For example, if a door is broken, is the landlord obliged to fix it? If so, what is the most cost effective way to make that repair?
If the property management company fails to be efficient in that area, the apartment owner loses money. If the apartment owner does not have a rental property manager that is maximizing profits, then what is the point of having one at all?
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