Welcome to the Topic “Property Management: Definition and Responsibilities”
Definition
Asset management is broadly defined as asset operation, management, and monitoring. Management suggests that it must be maintained and monitored, and service life and condition are considered. Asset management is also the management of personal property, equipment, tools, and tangible assets acquired and used to build, repair, and maintain the final product.
Asset management includes the processes, systems, and people necessary to manage the life cycle of all acquired assets as defined above, including acquisition, management, accountability, responsibility, maintenance, use, and disposal.
What is a Property Management License?
A property manager will usually need a property management or a real estate agent license to have a career in this profession. A property management license permits property managers to work in real estate and perform business-related professional duties. Specific licensing requirements will be subject to the state in which you live and work. Not only will you likely need a license, but getting one will also give you credibility in your field.
Property management licenses can be obtained through state governments, local authorities, or real estate agencies. To get a real estate management license, you must be 18 years or older and have a high school diploma; however, more companies prefer property managers to have a bachelor’s degree in business, real estate, or a related field.
How does property management work?
Property managers deal with everything that occurs in the rented property daily. They should have ample knowledge of the real estate industry in which the lease operates, such as industrial property or residential.
The property manager then works to make sure that the goals are met by managing rent, tenants, maintenance, budgets, and rental property records. Must also have a working knowledge of state and national laws regarding legal methods of tenant screening, security deposit processing, lease terminations, evictions, and compliance with property safety standards.
Property management duties
The number of responsibilities of the property manager depends entirely on what is stipulated in the agreement between the property manager and the landlord. While some landlords may want the manager to collect the rent, others may wish for the property manager to handle all outlooks of their property. Here is a list of the various property management responsibilities:
- Understanding landlord and tenant laws and regulations
- Handling maintenance and repair requests
- Marketing Features
- Tenant management
- Rent management
- Supervision of other employees
- Budget management
- Dealing with taxes
To be a good property manager, you must deeply understand state and national landlord and tenant laws. This includes understanding how to screen tenants, evict tenants, terminate leases, and more. The better you understand these regulations, the fairer and better property manager you will be.
Understanding landlord and tenant laws and regulations
A rental property manager should know the fundamental rights between landlords and tenants, especially when choosing tenants. Prospective tenants may have housing discrimination claims, and the resident manager must comply with all fair state and local housing rules. It may also be beneficial for a landlord to have an insurance policy covering employee wrongdoing.
After selecting a property manager, the landlord should prepare a written property management agreement detailing the individual’s duties, hours, and salary. This agreement should include expectations about how maintenance issues will be resolved.
For example, a manager can only spend a certain dollar amount before getting permission from the landlord. Landlords should try to anticipate problems and discuss them with potential managers before putting any agreement in writing. In addition, as an employer, the landlord must comply with federal and state tax rules and social security and record-keeping obligations.
Handling maintenance and repair requests
One of the main tasks of a property manager is to ensure that the property is maintained. Property managers must promptly respond to maintenance and repair requests to provide a livable and safe environment. This includes dealing with water leaks, smoothing removal of trash, etc.
For the performance of these tasks, property managers can do it on their own motion or hire a third party to handle the matter.
Marketing Features
One of the primary reasons landlords hire property managers is to help them market their property to new tenants. This requires the following processes:
Organizing Property Photography
Professional images taken to industry standards will help you get the best out of your rental property. This can make it more appealing and improve demand for your property from potential tenants.
Creating walkthrough videos and floor plans
These allow potential tenants to get an idea of what your property has to offer. A technologically advanced, market-oriented property manager can even provide 3D virtual tours, allowing tenants to enter and explore the property from their homes. This also extinguishes the hassle of arranging property inspections for new tenants while existing tenants are still living there.
Advertise your property
An excellent advertising campaign will include both online listings and physical lease signage on the property. Online listings are often posted on property manager websites and free listing websites, and some property managers will arrange for you to place premium ads on popular real estate websites. This increases the number of views of your property and possible inquiries due to its high reach.
Conducting Open Houses
A well-trained property manager will talk to potential tenants in available homes and get to understand them as people – as a first step – to assess their suitability. They then collect feedback and monitor whether prospective buyers are interested in the property. If so, they move on to the next step – vetting potential tenants.
Tenant management
Property managers are often entrusted with managing a variety of tenants. This includes finding the right tenant for the landlord’s property and vetting those tenants through various background and credit checks to ensure that the right candidate(s) have been selected.
Also, property managers will likely be tasked with handling all tenant leases. They are also tasked with dealing with tenant emergencies, moving, and evictions.
When dealing with a move, the property manager will need to assess the damage to the property. Depending on the property’s condition, the property manager can determine how much of the tenant’s security deposit will be returned to them.
After the tenant moves out, they must ensure the unit is clean, make necessary repairs, and remarket the unit. When it comes to eviction, if the tenant violates the lease, the property manager is responsible for starting the eviction process.
Rent management
Rent management is one of the primary responsibilities of a property manager. This includes determining the rental rate for the property. To do this, the property manager must assess the location of the property and the current market.
Once the tenant moves into the property, they will be tasked with collecting rent from the property on a specific day and through the chosen medium. The property manager can also change the rent rate as long as they comply with state or city laws.
Determining the rent is a fundamental duty of every landlord. Therefore, it is one of the most common tasks that a landlord hands over to a property manager. The property manager fixes competitive rent prices to attract tenants to the property.
This is generally done by researching comparable properties in the area – this should also be done at least once a year to remain attractive to tenants.
Rent collection
The property manager also organizes a system for rent collection from tenants. To ensure adequate cash flow, they set a collection date to ensure monthly property expenses are paid and strictly enforce late fee policies.
Read More: Effective rent collection
Supervision of other employees
If the property has additional staff, such as security, the property managers are responsible for supervising them. This includes salary negotiations and possible termination of employment.
Budget management
Property managers may also be in tasked with managing the property’s budget and other important records. This includes factoring in the property budget and organizing all tenant leases, claims, repair costs, etc.
After consulting with the owner, Philadelphia Property Management Company will prepare detailed budgets for the day-to-day operation of the property. This function includes aspects of all other functional areas as it allocates funds for their performance.
It will be necessary to estimate income from rents and reasonably estimate expenses for the other three functional areas. The costs of tenant services, repairs, maintenance, and administration will need to be accurately approximated.
Dealing with taxes
Finally, landlords may need assistance from a property manager when filing taxes. In some cases, the property manager can file the property tax himself.
You must declare all rental income in your tax return if you rent a property. This requires detailed record-keeping to ensure you meet tax requirements; property managers can take care of this for you.
When you have an investment property, expenses are inevitable. However, you may not have known that many of them can be claimed at tax time. They range from council and loss charges to insurance and repairs. Some of these can be overlooked by local landlords, meaning they can be left out of pocket due to insufficient entitlement.
To claim the deductions properly, these accounts must be inventoried before the accountant’s visit. Property managers will handle this for you as part of the sample reporting service and highlight tax deductions on your final report. This will ensure that you maximize your deductions and reduce the risk of incorrect claims.
Final thoughts
Understanding the duties and responsibilities of a property manager will help you decide whether you want to do it yourself or task it to a reputable property manager.
Once you understand a property manager’s responsibilities, you can make effective hiring decisions. This will not only save you money but also unwanted stress and a lot of time. However, if you manage your rental property yourself, you’ll at least have a checklist of items to consider.
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Also Read: Do I Need a Property Management Company?
