|What Every Real Estate Investor Needs To Know About Apartment Property Managers
By Abhi Golhar, Forbes Real Estate Council
If you are looking for a way to diversify your portfolio while building wealth for the future, buying an apartment building could help you achieve both goals. There are enormous advantages to owning rental property, and investing in a fully-rented apartment building could bring you a steady stream of rental income – money you could use to supplement your retirement income, boost your savings and help you prepare for the future.
If you have never considered investing in real estate before, you might want to rethink that decision. From beneficial tax treatment for your profits to generous deductions for depreciation and other costs, the advantages of owning rental real estate are very clear.
On the flip side, investing in real estate also gives you a new status – that of a landlord. That is a status many investors would rather not have, but you do not have to take on all the responsibility of apartment building ownership. By working with an apartment property manager, you can leave the day-to-day management of the property to someone else while you book the profits.
What Does An Apartment Property Manager Do?
Whether you are new to investing or an experienced old pro, there are real advantages to working with an apartment property manager. In exchange for a small percentage of the rent roll, these professionals will perform a host of vital duties, including:
* Helping property owners research the local rental market: Property managers can help owners research the local rental market, making it easier to set appropriate rents for a newly constructed apartment building.
* Communicating with tenants: This communication can include things like changes in rental rates, additions to the lease agreement, new policies regarding pets and visitors and complaints from neighbors. It is important that property managers have solid communication skills, along with the ability to interact effectively with all kinds of people.
* Collecting the rent: Apartment property managers are responsible for collecting rent and making sure that all tenants pay on time. For this service, property managers generally receive a percentage of the rent roll.
* Finding and screening prospective tenants: Property managers will place ads to attract tenants and conduct background checks to screen prospective renters. As part of the process, the apartment property manager may check credit reports, verify employment and check references from past rental units.
* Dealing with complaints: Property managers deal with the range of complaints from tenants, from issues with noise from other renters to problems like leaking pipes and deficiencies with the heating and cooling system.
* Handling emergencies: When a toilet is stopped up at 2 a.m. or the furnace breaks down on the coldest night of the year, it is the property manager who gets that call.
* Coordinating move-outs: When a tenant moves out, the property manager will coordinate the event and conduct a post-rental inspection. The results of this inspection will help determine whether or not the tenant will get their security deposit back.
* Dealing with evictions: No landlord wants to evict a tenant, but in some cases, an eviction is the only course of action. The property manager will handle all aspects of the eviction process, from serving notice on the tenant to changing the locks to contacting local authorities if there are issues with the move-out.
* Conducting routine maintenance: Every apartment building requires routine maintenance, and the property manager is responsible for coordinating the work and making sure it gets done. From painting the hallways to laying down new carpet to fixing up apartments between tenants, the property manager is responsible for all these things.
* Understanding landlord/tenant law: The laws governing landlords and tenants can be quite complicated, and it is important for an apartment property manager to understand those regulations and abide by them. From how to handle evictions to issues like rent control, the property manager must have a solid understanding of the underlying law.
As you can see, the job of the apartment property manager is a complicated one, but the career can also be quite rewarding. Property owners rely on their apartment managers to screen tenants, collect rents, make repairs and handle all the day-to-day aspects of their real estate empires. If you love the idea of investing in property but hate the thought of being a landlord, hiring a property manager could be the right choice.