Congratulations, you’re one of the savvy investors who’s purchased a rental property!
With the availability of homes for sale and rent in California at an all-time low, keeping your property occupied should be relatively easy, right? But what about all the tasks that come with owning a rental property?
Some property owners choose to manage their own properties; perhaps they like the hands-on aspect of propertye maintenance and choosing their own tenants, or they’re concerned that the cost will affect their bottom line. Rental property owners who know they don’t have the time, resources or desire to do it all themselves may choose to hire a professional property management company.
How do you decide?
Review these 8 things rental property management companies do to help you decide whether you should hire a property management company or D-I-Y it.
1. Deals Directly with Prospects and Tenants
This includes finding tenants, screening applicants, managing leases and setting appropriate rent levels in compliance with state and municipal laws.
A skilled rental property management company will know where, when and how to advertise your vacant property to get you the high quality and quantity of prospective renters needed to minimize property vacancies. They can even write and post your ads so that they appeal to and reach the target market for your property.
Effective screening of rental applicants can yield reliable tenants who pay on time and stay in their leases longer. Thorough screening of prospective renters includes running credit checks, verifying employment, checking references and performing criminal background checks.
For newer property owners, it may seem that you can create a standard lease agreement for the ages–easy enough, right? Not so fast. Managing leases can be a full-time job in itself. An experienced property management company will:
- Draft rental agreements that have the necessary legal clauses to protect both landlord and tenant
- Consistently review rental agreements to ensure language is accurate, up-to-date and legally compliant
- Determine and document security deposit amounts
- Execute leases, which means that all parties involved have signed, dated and received signed copies of the agreement
- Modify leases when terms have changed, e.g. when rents go up or down
- Terminate leases
- Renew leases in a timely manner
Some property owners will try to save time and hassle by letting leases lapse into an “automatic” month-to-month term. Renewing leases allows you to plan and budget for periodic property updates, avoid having vacancies during low-leasing seasons and show renters you care, which can result in happier, longer-term tenants.
Setting rent levels
Setting proper rent levels can make the difference between earning a healthy income on your property and pursuing an expensive hobby. A qualified property management firm can provide insight and analysis on your specific market and help you set competitive but profitable rates.
2. Collects and Deposits Rent
Collecting timely payment from customers is a challenge in any business. Experienced property management companies have systems in place for collecting and depositing rent payments, security deposits and late fees in an efficient and timely manner.
3. Handles Maintenance and Repair Issues
Regular, ongoing maintenance is necessary to protect your property value and keep tenants happy. Rental property management companies have the experience and resources to get the job at hand done, including handyman services, contractors, and staff. And don’t forget the unscheduled maintenance requests that come in, often at night or early morning, when tenants lock themselves out of their units or have a clogged toilet. Many property management companies provide 24-hour on-call maintenance service.
4. Responds to Tenant Complaints
Tenant complaints can range from complaints about noise and pest infestations to concerns over potentially hazardous conditions like toxic mold, faulty wiring, lead paint and carbon monoxide. A good property manager knows how to handle these complaints in a professional, timely and non-emotional way.
5. Handles Move-Outs
Move-out duties include returning (or not returning) the security deposit, cleaning the property and making any repairs. In the unfortunate circumstance of an eviction, these tasks can become especially tedious.
6. Keeps You Compliant
Good rental property management firm managers have an in-depth knowledge of state and national laws governing the rental property industry. They’ll help to keep you legally compliant and minimize your risk exposure when it comes issues ranging from safety and environmental compliance to discrimination and eviction.
Local, municipal and State of California laws are designed to protect tenants from health and safety risks that can result from everything from inadequate heating and property deterioration to unsanitary conditions and inoperable hallway lighting. Inspection by enforcement agents can occur anytime and–if violations are found–result in misdemeanor charges which are punishable, imprisonment or both. Having a qualified property manager who knows and complies with state and local laws can protect the owner and the tenant and help mitigate costly legal situations.
Rental property management firms actively look for and remove any potential environmental hazards to tenants, including toxic mold, asbestos, carbon monoxide and lead.
The federal Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status and disability. The State of California also abides by the Unruh Civil Rights Act which further protects consumers against discrimination based on ancestry, age, medical condition, genetic information and sexual orientation. Inexperienced property owners can unknowingly violate discrimination laws by simply using the wrong word in an advertisement, rental application or conversation, leaving them exposed to lawsuits and penalties.
Evictions can be costly, time-consuming and even dangerous. If you find you need to evict a tenant based on non-payment or other lease violations, it’s important that you follow specific procedures for legal action and documentation. An eviction in California can take as little as three days or up to several months depending on factors like tenant cooperation and availability of proper documentation. A reliable property management firm can save you time, hassle and potential lost revenue by handling the eviction process for you.
7. Manages the Budget and Maintains Records
A property management company can assist you with tedious record-keeping responsibilities advise you on which deductions you can claim, and even file taxes or the property. Note: Property management fees themselves are typically tax-deductible.
8. Supervises Property and Personnel
Qualified property management companies will supervise and manage maintenance and security personnel to ensure they do their work in full and on time. In addition, they can provide 24/7 protection of vacant properties against theft and vandalism.
Deciding Whether a Rental Property Management Company Is Right for You
Knowing these 8 things that rental property management companies do can help you make the best choice for your situation. You’ll also want to weigh your available budget, time and resources to know what’s right for you. Whether you choose to hire a rental property management company or manage your rental property yourself, we have the tools and information to help keep you from getting in over your head.
Check out our blog at or call us at (310) 310-8063 to learn more.