Property Management Company

Melvin Scoville

In today's article, I'd like to cover a couple of important topics, and those are:
What is a Property Management Company?
and
What should I expect from a Property Management Company?

OK, so I first want to start out that as a property owner, you should focus on being an "Asset Manager" versus a "Property Manager".  Darin has covered this in-depth in the Members Area, but in general, focus on managing your property as an investment asset.  Keep your mindset on the "Big Picture" of increasing revenue and decreasing expenses on a continual basis.  This is versus what I would call the "Property Manager" activities of day-to-day management of maintenance and rental of the units.

Property management is key to your success, and a substantial investment expense in running your property.  Just like any other business, great management will make all the difference in the world for your returns and profits.  Let's go over some of the key activities you should expect from your property management company:

1.  Maintenance
Your property manager is firstly responsible for maintaining the interior and exterior of the property.  I'd like to note that maintnence expenses are typically going to be a separate line item from the property management fees.  Your management company may have on-staff maintenance personnel, but the work they do and materials expenses are separate from the actual management fees.  For example, the property manager will hire the lawn mowing company, but the bill for the lawn mowing would be separate from the actual management fee.

Maintenance is defintely an area to focus on and make sure that dollars are being allocated appropriately.  It's important that the property has great curb appeal as you enter the property or pull up to the building.  It's also very key that a unit is "turned" in a timely manner and that it is rent-ready when a resident moves in.  Everything doesn't need to be brand new, but the paint should be fresh, the carpets professionally cleaned, any maintenance has been done, everything is in working order, and it is immaculately cleaned.  Going through these motions before a resident moves in will not only make them happy with their unit, but will substantially reduce any emergency maintenance calls.

2.  Marketing and Rental of Units
This also covers a wide range of activities, but basically your property management company will be running advertisements and marketing the units for rent.  They should be monitoring market rents of competitors, as well as any specials or concessions that the competition is using to attract new residents.

The rental of the units includes many sub-activities, as well, including:
Taking phone calls from prospective renters
Doing property tours and showings of the units
Processing applications and ensuring new residents meet qualification guidelines
Getting lease documents signed and procedures covered with new residents

I could go into great detail on each of these line items, but suffice to say, your property management company has their work cut out for them.  In my next article I'll be covering how to find a good property management company so keep a lookout!

3.  Collecting Rents and Paying The Bills
Your property manager will also be responsible for the actual rent collection and making sure all bills are paid for subcontractors, utilities, and the like.  This is great news for you because you won't have to be writing out all those checks.  However, it's important to monitor these expenses and be sure there are guidelines when they will need your approval.  For example, you'll definitely want to have an agreement that any expense over a certain dollar amount will require an approval from you.  This will help to keep any large expenses in check, as well as making sure there are multiple bids for larger dollar amounts.  Again, I could go into great detail, but in general, your management company will be handling those day-to-day activities.

4.  Enforcing Rules
Lastly, your property management company is going to be required to enforce the rules for residents.  You and your manager have  taken a lot of time making sure the lease documents and resident procedures are in-place.  It's important that these are enforced for the benefit of all residents.  For example, they'll want to make sure that any loud parties are addressed immediately, and that there are no cars up on blocks in the parking lot.  Making sure that rules like these are enforced will make the property much more desirable for current residents and prospective new residents.  In the end, making it a well-managed and appealing place to live for everyone.

This is just an overview to give you a definition of what is an apartment property management company, and what you should expect from them.  This is a very detailed subject, but making sure that you're focused on the "Asset Management" and managing the manager will increase your profits and your asset value.  In my next article, I'll talk about finding a good property manager so keep a lookout!

For more information, be sure to check out my latest video link at the bottom of this page!