September 2012

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When it comes to property management, most folks assume that it has to be the easiest and highly paid job in the world.  But there is a lot more to it than just picking up the rent once a month and fielding the phone calls from the tenants and the property owner.  For those investors thinking about taking on a little property management for others for the first time, you need to be aware of what you are getting into and how much time it really does take behind the scenes (that no one else sees including your tenants and property owners).

First of all property management means just that—-you manage the property for the landlord.  Ideally, this is a service job and that you provide the landlord the service of making his life extremely easy and worry free.  The landlord wants to be able to concentrate on other deals or investments so he finds himself a property manager that will take all of his worries off his hands on a day to day and week to week basis.  Ultimately, the best property manager will never have to call other than for two reasons: that he is receiving how much in this month’s payables and what he may want to do when it comes to a major repair cost such as a roof or updating plumbing (anything over the allotted monthly maintenance cost).

P.M.’s should be capable of picking up rents on time, paying the common area’s utilities, maintaining an emergency fund for repairs, and paying maintenance or contract workers their money upon job completion.  This is in addition to going out once a week to check on the property, doing a police call for clean-up such as picking up trash, keeping sidewalks and curbs swept and clean, cleaning the shared laundry areas, noting any unusual abuse or on the run tenants moving out in the middle of the night activities, insuring that work crews do the job and do the job correctly, and even chatting with the tenants.

On average, the PM should be over at the managed property at least once a week for at least 4-8 hours, 4 times a month.  That is what they get paid for with their percentage cut on rent rolls.  Any additional payments would be for the heavier work done such as doing a major repair job or painting job on their own should they choose not to hire a contractor.

Thus, it is important that the PM finds good properties that are well maintained from the get go.  That the rent rolls are high enough to be paid for the normal 16- 32 hours per month that they would work, and that the landlord has a sense of pride in ownership or is not cash-strapped.

Because not only are you taking on the risk of the landlord going into bankruptcy/foreclosure for not doing his part, but that your company name as a PM is connected to his and if they look bad, so will you.  And when, other landlords look at property managers, they are judging you not only on your competency, but what do your other properties look like.


Johnny and Crissy