Arrant Construction

How Property Management Companies Help

How Property Management Companies Help

Rental properties can be fantastic investments but managing them can feel like a second job. Juggling maintenance requests, tenant concerns, and financial nitty-gritty can be overwhelming, especially for those with multiple properties. 

This is where property management companies come in. While their specific services may vary, most companies offer a core set of solutions to organize your experience. Here’s a breakdown of how they operate and what you can expect on a regular basis: 

What Property Management Companies Do 

Ever feel like your rental property is a second job? Property management companies can be a lifesaver for busy owners, taking care of the tasks that keep your investment humming. Think of them as your personal assistant. 

These companies offer a range of services, customized to your needs and outlined in a clear contract. They can handle everything from the everyday to the unexpected, freeing you up to focus on other things.  

Here’s how they lighten your load: 

Finding the Perfect Tenant: Property managers act as your screening gatekeeper, sifting through applicants and running background checks to find responsible renters.  

Move-In, Move-Out: They ensure your unit is sparkling clean and ready for new tenants, and handle the paperwork to make the move-in process smooth. 

Rent Collection and Recordkeeping: No more chasing down late payments! Property managers collect rent, deposit it securely, and keep records for tax time. 

Keeping Things Fixed: Leaky faucet? Broken light switch? Property managers handle maintenance requests, dispatching repair crews or their own handyman for smaller issues. 

Sprucing Up the Property: They maintain the curb appeal and functionality of your property, taking care of lawn care, snow removal, cleaning common areas, and any other upkeep tasks. 

Marketing Marvels: When a vacancy pops up, they become your marketing team, advertising your rental and showing it to potential tenants. 

Conflict Resolution Crew: Facing a tenant dispute or late payments? Property managers handle these situations professionally, working to find solutions and enforce lease agreements.  In extreme cases, they can even manage the eviction process. 

Depending on how involved a landlord wants to be, property management companies can handle various responsibilities. Some landlords prefer to manage tenant screening themselves to ensure renters align with their standards. Remember, all leasing must adhere to the Federal Fair Housing Act, which prohibits discrimination. 

Full-service property management companies can manage all aspects of property care. When these companies handle tasks efficiently, they greatly reduce the burden on property owners. This includes managing routine duties and unpleasant tasks, such as starting eviction processes and dealing with problematic tenants. 

Owners will still stay informed about their properties. There should be regular communication with the management company, and landlords should have the final say on major decisions. Often, landlords need only to monitor their accounts for rent deposits. 

Is a Property Manager Necessary? 

Some investors, familiar with the benefits of property management companies, hire one even before purchasing property. Others might consider this option after attempting to manage their properties on their own. 

Here are situations where hiring a property management company can be beneficial: 

– Multiple Rental Units: Managing several rental properties, especially if they are in different locations, can be overwhelming for one person. Even managing a few properties can become difficult as the landlord ages. 

– Distant Landlords: If the landlord lives far from the property, having someone nearby to handle tenant needs is crucial. 

– Avoiding Employer Responsibilities: By partnering with a property management company, landlords can avoid the complexities of hiring, paying, and handling tax documents for employees. 

There often comes a point where the cost of a property management company is justified. The value isn’t just in the financial savings, but also in the time and effort saved by the property owner. 

Understanding the Costs of Property Management Services 

Property management companies charge rental owners for their administrative and maintenance services. The costs can vary based on the specific services provided, but all details are typically outlined in a contract. Most companies follow similar pricing guidelines. 

Property management fees usually range between 8% and 12% of the property’s rental income. Owners need to clarify whether this fee is based on rent due or rent collected, as collecting rent on time can be challenging. It is often better to pay the company only for the rent they successfully collect each month. 

The contract should also address how vacant units are handled. If a management company receives the same fee regardless of occupancy, they may have little motivation to find new tenants. 

In addition to the percentage of rent, owners may incur other costs for services like repairs, advertising, credit and background checks, and accounting. These could be billed as a flat monthly fee or as itemized expenses, depending on the number of properties covered by the contract. 

For example, a small apartment building with four units might have an on-site maintenance person. The owner could receive a monthly bill based on actual receipts submitted by this individual. In contrast, larger properties or those managed by bigger companies might be charged a flat fee due to the complexity of tracking specific expenses. 

Normal monthly expenses are often included in the flat fee, but extraordinary costs, such as repairing a burst pipe or replacing a refrigerator, might be billed separately. These details should be clearly outlined in the contract to prevent unexpectedly large bills. 

Many property management companies also require owners to set up a reserve account. This allows the company to cover expenses without waiting for payment from the owner. The contract should detail how this account is funded and managed. Knowing these terms is crucial before signing any agreement with a property management company. 

Choosing the Best Property Management Company 

There are over 275,000 property management companies in the U.S., employing more than 825,000 people. With so many options, property owners need to know what to expect from these companies to find a trustworthy one. 

A top-notch property management company builds a strong partnership with property owners. They care for tenants and prioritize the owner’s interests, all while complying with state and local laws. 

At Arrant Construction, our experienced staff provides exceptional support to owners and tenants in Houston. We welcome your questions about our services and how hiring a property management company can benefit you. 

FAQs 

What does a property management company do for owners? 

A property management company handles day-to-day tasks like finding tenants, collecting rent, and dealing with maintenance issues. This helps owners save time and reduces the stress of managing the property themselves. 

How do property management companies benefit tenants? 

Property management companies ensure tenants have a smooth rental experience. They address maintenance requests promptly, handle lease agreements, and provide clear communication, making tenants feel cared for and secure.

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