Joseph Rubay

How To Choose The Best Property Manager

Residential and commercial property management is a field that for too long has lacked enough competition to really force companies to maximize their value for customers. For that reason, there are many subpar property managers out there that sully the industry’s reputation. But if you’re willing to do your homework, putting your real estate investment in the hands of the right company can lead to consistent positive returns. By focusing on understanding what are his/her responsibilities, what do you expecting for him/her and make sure that they could meet the requirement! below you can ensure that the property manager you hire is the best property management company for you.

WHAT ARE THE Property Manager Responsibilities

Property manager roles are far more complex than the two tasks people normally observe and take at face value: collecting rent and fixing things that don’t work. Be prepared for this stereotype when interacting with tenants!

A property manager’s role at a high level includes;

  • Leasing
  • Administration
  • Maintenance services

In general, the Property Manager reports to the Owner of the property. The property manager may also direct the Superintendent as necessary and manage on-site and contract staff performing maintenance and refurbishment activities. Below we go through these facets in more detail and also give you something that you can use to benchmark performance for annual review activities if you chose to use a 3rd party to manage your properties.

Objectives

1. Conduct financial transactions needed for the operation of the building. This means that although you own the property, they essentially deal with money from the client and, after expenses, provide you with the income generated. This means that you need to be able to trust your Property Manager from the outset. A suggestion is that you allow (if possible) the Property Manager to front some of the money for the venture–we will discuss this later. 

2. To provide security and wellbeing for occupants of the building. This is obviously needed if you want to retain the tenant. If your Property Manager does not have the skill set to achieve these items, you will have a higher vacancy ratio. Your Property Manager is part of YOUR brand, they reflect you in every way. Failing to meet just basic Maslow’s hierarchy of needs, such as heat, water, shelter, security, means that the tenant cannot achieve higher levels of success in their lives and most certainly leave.   

3. To maintain the property to the Owner’s standard. This is an interesting topic. What is the Owner’s standard, if a property has furnishings, at what point does the chair arm wear impact this and need maintenance or replacing? Some Property Managers are given no instruction here however this detail is enough to put a rope around your neck if the tenant leaves and cites this in feedback. Make sure you clarify this with signed off documentation.

4. To advance where possible the human and technical skills of the Superintendent and staff. Remember the phrase ‘the best practice is to follow best practice’. While it has its origins in engineering, it is applicable here. By investing in upskilling all parties in soft skills and technical skills, it helps with communication formalization and transparency. By proxy, this helps with increasing the overall quality of the service offered, by stopping things agreed up, such as action items to be forgotten.

5. To provide a professional service for the people working in or occupying the property.

6. To ensure that maintenance, either proactive or remedial, is conducted adequately in a cost-effective and professional manner. While these sound obvious, the devil is in the detail. For example, when do you conduct planned maintenance and has the Owner agreed to it? If you have partnered with the investor, has the investor formally agreed to any maintenance costs being taken and to what extent is acceptable before a meeting is required to define a larger body of work to be conducted. Make sure that everything is clear in a contract formally to ensure there is no ambiguity, as it may cost you the entire venture.

7. Maintain a harmonious relationship with occupants and visitors of the property. People skills are key, including manners. Never go to a property that is not vacant without a written letter sent first to the tenant and ensure that if they need to rearrange, you give them an option to do this through the letter. Never speak to tenants in public unless they start the conversation; their business is not yours.

Role Accountabilities

The property manager has the following accountabilities that they must be held to thorough review processes.

1. To hire all resources, including workers, trades, legal professionals as required for the proper operation and maintenance of the property.

2. To lease the property with the intent to maximize the long-term profit of the property and duration of the selected tenant.

3. To collect all rents and fees.

4. To conduct risk management activities, including fire audits and provide insurance for the property.

5. To pay taxes, fees and utilities related to the property and services offered.

6. To maintain all financial and business records, including those required for the management, supervision and control of the property.

7. Create reports each quarterly on all operational activities of the property, including financial summaries and relevant statements, tenant leases and reports on projects (one-off operations) e.g., construction, renovations, repairs, which affect the general management and operation of the building.

8. Maintain a bank account for all rents and fees and all expenses related to the property are drawn solely from the same bank account. Remember that full records and receipts need to be kept.

9. To prepare budgets that show receipts and disbursements that need to be approved by the owner. If the manager needs to expense an item that has not been accounted for in the budget; the manager will need to obtain prior written approval beforehand.

Functional Performance Tasks

1. Collect Rents and, when required, make and deliver notices for late rent, charges for damages, eviction, etc. This is where buying property near others is useful for such tasks. Hopefully, however if you have done your job well, you will be doing some of these things less; automate everything you can using technology to save you excessive travel, travel expenses, and dealing with mileage claim forms.

2. Conduct banking and maintain records. Separate accounting records are needed for the following; commercial, apartment, shared and prepaid rents, parking, key deposits, services or offerings, miscellaneous charges, petty cash.

Make sure that you have backups of all of these records; if your old computer just went up in flames; are you also done!? There are different ways of handling such tasks, from cold backups with an external hard drive to cloud-based solutions. While we are initially talking about maintaining records, we are also talking about how you and possibly others interact with the business. To aid transparency, do you use a centralized cloud solution that allows owners to access key account details using an app or a website portal? 

3. Report on activities in owner agreed formats; as mentioned above, how you run your business is going to impact how data can be reported to the Owner. Automation may be useful here to reduce repetitive tasks.

4. Show apartments and manage leases. Be prepared for last-minute showings, have a system that has everything that is needed to hand; a good idea is to have both digital and hard copy available – do not rely on an internet connection in any circumstance to conduct business in this process.

5. Assess prospective tenants through credit checking and reference checks. Have processes set up to make this as easy as possible with documents templated and ready for when they are needed.

6. Maintain a list of vacancies and upcoming vacancies to ensure prospective tenants get good advice related to availability. This can be a good area to use web applications to take the hard work out of this.

7. Maintain a list of debts, damages, and lost revenue. Follow up and report on demands for payment. You are going to need to design a workflow for these and ensure each correspondence to be tracked and logged.  

8. Ensure vacancies are advertised. Many property websites can save templated content for you to quickly use before a tenant leaves; alternatively, you may have your own templates locally for each apartment. If you are starting out or have only a few properties, using a cost-effective marketer may be easier than the time and divided costs of these other platforms.

9. Inspect properties including shared areas if applicable; plan and implement maintenance as required. You need to keep detailed records and images of the property. These days you can also 360-degree scan property to give websites a virtual tour of the property in addition to being able to see for yourself virtually the property quicker than flicking through pictures. 

10. Supervise staff in cleaning, maintenance and repair, tasks and conduct staff scheduling as necessary. This is a whole challenge in itself. You need to provide the tenant with a way to give feedback on the quality of work. If the tasks are in vacant properties, ensure that you inspect them before and after work is completed to ensure these activities are conducted to the standard that you were expecting.

11. Maintain staff time records for payroll. Potentially you will need to research and select an adequate solution and ensure it can connect to your existing system.

12. Create payroll statements; It is likely that the solution you find for staff records will also automate this.

13. Plan and conduct maintenance based upon received maintenance requests. Perhaps automate this with a cloud-based ticketing system that documents issues for auditing and priorities items.

14. Ensure office stationery and lines of communication are available to enable operational activities are suitably handled.

15. Ensure other supplies and materials that are required for office and maintenance activities are available. If you have numerous properties and numerous staff, create an inventory system. Work conducted may have item references for consumables and quantity used to ensure everything is accounted for. If you set up an automated inventory system, it will warn you of when you need to reorder.

16. Monitor contractors when on-site work is being conducted. This is a difficult thing to do as you need to keep good relations, however, this needs to be done to ensure contractors meet their project window; time, materials, cost and quality are as expected and if they are, they should finish work correctly before the deadline stated. Always check the work on site before sign-off. If you need a separate specialist to do this, use them to give you peace of mind.

17. Review and prepare cheques or invoices for signing and payment. Again, much of this can be handled by accounting software or specialist applications. Research the best ones and ideally integrate this into your existing systems.

18. Check the property when a tenant leaves; check lights are off, all water taps are off, close windows and entrances, check gas systems. Make a list of work to be carried out and report on action required for unpaid rent and damages.

19. Prepare the schedule of properties requiring work. Create an action plan first and then feed it into an ongoing schedule for the property that you keep maintained. These types of work, if large enough, may require dedicated project management processes to be used to complete at the lowest cost to your venture.

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