Introduction to Property Management
Property management involves the operation, control, and oversight of commercial, residential, or industrial real estate. This involves a hired company with accountability for numerous aspects of the property. For residential rental units, the property management company will conduct background/credit checks of potential tenants, handle leasing contracts, collect monthly rent, maintain on-site amenities, and keep the owner abreast of any concerns or problems.
While the benefits of a property management company can be enjoyed by anyone, this service is often most advantageous for owners who live out of state or have multiple properties. Regardless, the company serves as the eyes and ears of the owner while handling the responsibilities of the property.
In most states, a property management company must possess specific licensing in order to list properties, negotiate leases, conduct inspections, and accept rent payments, among other things. Most states, excluding Vermont, Idaho, and Maine, require a property manager to be a licensed real estate agent or someone working under a licensed broker. However, in South Carolina, Montana, and Oregon, a real estate license is not mandated, although a property management license is.
Benefits of Property Management
There are tremendous benefits in using a reputable property management company, which include:
- Higher-Caliber Tenants – Because the tenant screening process is stricter, more people pay rent on time, stay longer on the property, take better care of the rented unit, and overall cause fewer problems.
- Vacancy Cycles – Because of the services provided, a reputable property management company will perform critical tasks that shorten vacancy cycles. This includes making necessary repairs and/or improvements to the property, determining appropriate monthly rent, and conducting effective marketing.
- Rent Collection – The success or failure of a property has a lot to do with how rent is collected and late payments are handled. The property management company will set payment criteria for everyone without exception. By enforcing the terms of the lease, tenants know that unless their rent is paid as stipulated, an eviction is imminent.