For me, property management is an integral part of my real estate business. It keeps me connected with the housing market at large, not just the buying and selling part. Property management allows me to make contact with investor buyers/owners who are in the business of providing rental units to the rental market. It’s also a great opportunity for me to stay active in the residential real estate market even when I am not working with a buyer or seller; I get to meet people who are relocating, people who have sold their primary residence and are looking to buy another and even college students among many others.
What does a Property Manager do?
As the name implies, I manage the day to day operation of a residential building from single family homes, duplex or multi-family dwellings for the owner. Essentially, we take over the tasks that all landlords are responsible for, but we handle them in a professional, legal manner. Here are just a few typical tasks or responsibilities we find ourselves doing as property managers:
- Screening Tenants
- Collecting Rent Checks
- Scheduling/Coordinating repairs and upgrades
- Paying utilities, bills, taxes and warranties
- Showing Rental Properties
- Posting advertisements about vacant rentals
- Inspecting Properties and doing walkthroughs
Again, these are just a few of the responsibilities that we handle on a day to day basis as property managers. Recently I wrote a list of important things that a property owner should be doing with their own rentals if they don’t currently have someone managing for them. These responsibilities shouldn’t be taken lightly.
How much does a property management company charge?
I cant speak for every company, but I charge a percentage of gross rents received and that percentage is usually between 8% and 10% depending upon the property, location and other circumstances. The fee I charge on a typical rental is usually $70-$90 per month; Less than the monthly utilities.
Why would someone need a property manager?
There are many reasons that someone would want a property manager, but here are some of the reasons that my current clients have:
- The Property is owned through a Self Directed IRA/Trust
- The owner doesn’t have time to deal with the responsibilities.
- Collecting rent and keeping track of income and expenses is a hassle.
- The owner lives out of State and can’t reasonably manage the property.
- Most owners are not skilled or capable of showing, screening and meeting tenants because of their ‘personal attachment’ to the property.
- Because we understand the business and know how to deal with just about every circumstance that could threaten the property.
Most owners call us because they aren’t familiar with how to convert a home into a rental. While it sounds simple, there are complex housing laws that are always changing. In addition to the legal aspect, there are ‘tricks of the trade’ and knowledge that I have over someone who has never managed a rental unit. The cost of hiring a manager is well worth it when you consider the liability and the time associated with properly managing a home.
What is the current rental market look like?
At the time of writing this letter, the outlook for property owners is mixed as well as it is for tenants. As with the re-sale real estate market, the outlook is based on location, time of year and type of home. But, with the re-sale market continuing to slip, the opportunity for owners to purchase quality real estate is quite good! For tenants however, be weary! There are a lot of good rentals available, but many are in some sort of financial distress where owners have stopped or are going to stop making payments to the bank which means you are likely to get evicted once the home has been auctioned.
In the coming months, expect there to be fewer quality rentals available and prices to trend upward with the warmer weather. Here is a list of my average rents throughout the valley:
- Southeast Boise- 3 bed 2 bath 1500-1750 square feet- $1100-$1200+ (quality market for owners- short supply is the cause)
- Meridian- 3 bed 2 bath 1200-1500 square feet- $750-$900 (moderate to high inventory)
- Meridian- 4 bed 2.5 bath 2000+ square feet-$1200-$1500
Kuna- 3 bed 2 bath (and a bit larger) 1500-2000 square feet- $850-$1000 (for whatever reason, homes are renting quick)
Do I need to hire property manager if I own a rental?
In one word, yes! Certainly, you are capable of managing your own rental, and perhaps you’ve been doing so just fine, but, there will come a time sooner than later that the scope of your knowledge and understanding will not cover a certain scenario, usually by that time much is lost. If you aren’t updating yourself on the changes in law, the changes in marketing and protecting your rental like a professional company would, then its time to give us a call. We can diagnose your situation or even give you insight into how to get started in acquiring rental properties and start building a solid rental portfolio.