Managing a rental home from across the country or overseas can be daunting for military homeowners. For this reason, many service members turn to property management companies to help them navigate the process of renting their property while they are away.
Knowing how to find a property management company that will have your best interest in mind is crucial to the overall success of your rental. Get to know the role of a property manager and review our top tips for finding the right property management company for you!
What Does a Property Manager Do?
A property manager’s main job is to manage the routine operations related to your rental while ensuring it is consistently rented and profitable. In most areas of the United States, property managers are required to have a real estate license to operate legally. This qualifies them to create lease agreements that will effectively establish expectations and protect you and your property.
Property Manager Duties
- Screen tenants
- Secure tenants
- Establish lease agreements
- Collect rent
- Maintain property
- Hire contractors
- Market property
- Manage budget and expenses
- Ensure legal compliance
- Evict tenants when needed
- Perform property inspections
- Respond to property emergencies
- Conduct market analysis
It’s important to note that not every property management company will offer each service listed above. However, the professional you hire should, at a minimum, effectively find tenants, manage tenant relationships, collect rent on time and ensure the property is profitable and maintained.
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Why Hire a Property Manager?
The benefits a quality property manager can bring to the table are numerous. Not only can they take many time-consuming tasks off of your plate, but they can also offer expertise that would require days or even weeks for the average person to properly research and execute. Below are the top reasons why military landlords choose to work with a property manager.
Benefits of a Property Manager
- Saves time: A property manager will save you both time and money. This is because the right expert will handle all aspects of your rental, allowing your investment to be more passive than hands-on.
- Legal compliance: The last thing you want to do as a landlord is accidentally get yourself into legal trouble! A licensed property manager will be familiar with all of the local laws and regulations, putting you in a great spot to confidently rent out your property.
- Tenant relations: Even the best tenants can sometimes be late on rent, and it’s stressful to have to track down what is owed to you. A property manager will handle everything related to your remnants from the moment they sign a lease to the second they pay their last month’s rent and move out.
- Property upkeep: If they don’t perform the maintenance themselves, a property manager will be able to vet local contractors and hire the right professionals to ensure your home is well maintained.
- Administrative services: In addition to collecting rent, many property managers will help you budget for the property and handle inconveniences such as securing insurance and scheduling property tax payments.
- Reduced vacancy rates: Due to their marketing expertise and connections, a great property management company will ensure your property always has a signed tenant.
Managing a property on your own can be difficult from a distance, but it isn’t impossible. Just know that, without the help of a property manager, you could run the risk of your home experiencing prolonged vacancy. Furthermore, if you’re not familiar with proper screening techniques, you could find yourself having to deal with an unreliable tenant.
In addition, choosing not to hire a property manager means that you will be on your own if you ever need to take legal action against a tenant. Failing to pay rent or damaging your property are the two most common reasons a landlord may sue those renting their home.
How to Choose a Property Manager
With so many things to consider, it can be tough to decide what features to value in a property manager. Knowing how to choose a property manager that will make your cross-country or overseas Permanent Change of Station (PCS) stress-free as a landlord should be a top priority. In addition, you’ll want to find someone who has the potential and promise to make sure your rental actually makes a profit.
Hot Tip: Thinking about self-managing your rental? While it can be difficult, many military members find it quite rewarding! Review these 5 Tips for Self-Managing Your Rental to help you determine if being hands-on is right for you!
Are they a member of the National Association of Realtors (NAR)?
For a property management company to be a part of the National Association of Realtors (NAR), that means they adhere to the association’s ethical standards, professionalism and best practices in the real estate sector.
In addition, a property management company that is a part of state and local associations will have access to property management agreement forms and lease agreements for residential property contracts created by that state’s real estate commission. A properly executed contract on a state-approved form protects you as the homeowner, the brokerage firm, the agents of the broker, and the tenants.
Keep in mind that companies that are not members of NAR and their state associations must purchase their own forms. They obtain these from an office supply store or employ a real estate attorney to design forms for their company.
Do their offered services justify the price?
Ask property management companies to provide you with a written list of rental management services offered to homeowners. Make sure this list clearly states their prices and any other fees you may be expected to pay during your partnership.
There is no standard for how property managers price their services, so you can expect each company to be slightly different. Determine what you need from a property manager, and once you have a list of your prospects, compare how much it would cost to work with each. This will help you identify the companies that offer the best services and prices relative to your needs.
Are they salaried or commission-based?
When interviewing property management companies, take a look at how their managers are paid. Does the brokerage delegate property management services to salaried agents? Or are the property management services commission based?
The business practice of salaried-only property managers is a huge disadvantage to you as the homeowner. This is because these property managers are not always motivated to show properties or execute leases on weekends. Why would they go out of their way if they are already collecting a paycheck?
This can result in prolonged vacancies. Ask the agent how he or she feels about working on weekends on an as-needed basis. If the salaried agent doesn’t offer occasional weekend service for emergencies, contact your 2nd or 3rd choice company that employs commissioned-only agents.
Interview 2-3 Commission-Based Property Managers
We don’t recommend just picking the first and only property management company you interview. Take some time to speak with 2-3 property managers that are commission-based, and see how you feel afterward. Who gave you the most confidence that they would take care of your property and have your best interests in mind?
Property Manager Interview Questions
- Do you perform credit and background checks on applicants?
- Do you contact previous landlords and employer references?
- How will you advertise my property for lease?
- Do you have any specialized training that makes you better qualified to serve military homeowners, buyers and tenants?
- What is your approach to renters who are not paying on time?
- In case of a property maintenance emergency, are you prepared to quickly and effectively handle all situations?
In today’s rental market, every property manager should conduct thorough credit and background checks. It’s the cherry on top if they also offer an employer and past landlord reference checks! At a minimum, your property manager should be advertising their rental homes on AHRN, along with other marketing tools.
Becoming a Military Landlord
However you choose to handle the rental of your property while you are out of the area, research and preparation are your keys to success. Both the homeowner and tenant are best protected when all expectations and standards are clearly expressed in writing. This applies to the homeowner and property manager relationship as well!
Whether you list your home for yourself or hire a property manager to do it for you, AHRN is a celebrated resource for everyone involved with military housing. Sign up at AHRN to find your next home near your new installation. Or, log in to explore how the site can help you find future tenants or homebuyers for your property.