Managing a property is just like performing in a circus act of spectacular proportions — often, managers feel as though they’re balancing on a tightrope while juggling the needs of tenants, unexpected property repairs and complex leasing agreements. It’s a lot to handle, but in the end, their work satisfies the masses.
If you’re new to the field, here are a few tips for property managers to get you started:
Tip 1: Set the Right Tone From the Start.
It’s crucial to establish parameters with the owner of the property you’re managing. This should come in the form of a formal agreement that outlines the duties of each signing party.
In essence, both you and the property owner should agree that management covers the operation, control, rent and leasing items associated with the property. Never attend to issues that fall outside of your responsibility as a property manager and as outlined in the formal agreement.
Tip 2: Get to Know Your Tenants.
This is one of the most important tips for property managers. The phrase “tenant screening”comes up often in property management for a reason.
Interview potential tenants in person and ask them to complete a rental application. Run a background check, credit report and take the time to call professional and personal references.
Ideally, you want to find someone that makes three times the rental cost each month and has a clean criminal record and rental history.
Once you’ve selected a tenant, don’t forget about them. Maintain an open line of communication to ensure they’re comfortable contacting you; try to use email to keep conversations on record.
Tip 3: Don’t Let You or the Tenant Take Charge of Repair.
One of the biggest risks a property manager can take is bypassing the hire of a contractor to handle on-site maintenance. Tenants and property managers alike are not experts in the field and both parties are subject to accidents, which can result in severe financial penalty. In the end, this type of risk can end up costing managers large sums down the road.
Tip 4: Hire the Right Person to do the Job.
Just as you’ve chosen to invest time in finding the right tenant, also invest in the right service providers to handle repairs. Build relationships with the contractors in your area. Eventually, you’ll have a valuable resource available to you when you need it most.
Developing a close core of help nearby can also save you money. Contractors have the authority to list their own price and when they’re newly hired they’re more likely to tack on hire prices for spot fixes.
Tip 5: Inspect Your Property on a Routine Basis.
Stay on top of inspections, whether it be for new or long-term tenants. Property managers run into cases all of the time where a long-term tenant failed to address a preventative maintenance problem that eventually unfolded into a costly and timely expense.
Negligence is one of the biggest risks you can take in property management. Keep detailed records of inspections and complete them on a quarterly basis, in the presence of the tenant.
Learn more tips for property managers in our commercial property management series.