The real estate market’s digital landscape has created new opportunities for real estate investors around the country. With effective virtual reality walk-throughs, real estate investors now have the tools to find attractive investment opportunities in locations that were once out of reach. As a result, it has become more commonplace for an investor to choose a property that is a significant distance from the investor’s home or office.
In 2020, more than nine out of ten buyers used online tools in their property search efforts. While purchasing real estate remotely has become easier, managing an investment property from afar is another story. Despite the distance, a rental property owner must ensure that the property and residents are well cared for, or the resulting high turnover rates may reduce the property’s cash flow and, ultimately, the rental property’s ROI - Return on Investment.
If you find yourself located far from a rental investment or without sufficient time to appropriately manage the property, a local representative (a.k.a. property manager) is the most efficient (and usually cost-effective) way to ensure the property receives the attention it needs.
In addition, it can be quite beneficial for renters to have a local point of contact to represent the interests of the owner. This ensures renters know someone is around if something happens at or in the property and they need help.
How can a residential property management firm help property owners better manage their remote properties? Read on to learn how.
Managing the residents processes of rental properties is critical to the property’s cash flow. A property manager can help manage the resident processes in the following ways:
- Finding & screening for qualified residents by marketing the property.
- Setting appropriate rents based on a legitimate understanding of local market conditions and demand.
- Preparing and enforcing the terms of the resident’s lease.
- Collecting rent & managing resident funds. Residential property management companies typically have existing online rental portals. This is a great benefit because –
- Most individuals under 45 prefer to pay rent online.
- Online rental payments tend to be more secure than cash or check.
- Those that pay rent online tend to pay their rent on time.
- The eviction process, if applicable.
- Managing ongoing resident issues, to name a few.
Another property manager benefit is their knowledge and experience of Landlord-Tenant laws, which are subject to change at any time. State laws for landlords and residents vary; however, the relevant federal Landlord-Tenant laws that apply to all states include -
- The Fair Housing Act – The Fair Housing Act (FHA) prohibits discrimination of defined protected classes in selling or renting residential real estate, mortgage lending, etc. Violations of the Fair Housing Act can have serious consequences.
- The Fair Credit Reporting Act – Screening a resident requires several important steps, including a background and credit check. There are guidelines for anyone who wishes to obtain a consumer credit report, including a list of permissible purposes. In addition, credit reports must be securely disposed of or stored by the individual entrusted with this personal and private information.
Property managers are also responsible for the physical management of the rental or investment property. Property manager tasks vary because owners typically have the option of customizing their services with a professional property manager.
A property manager’s fundamental responsibility in this regard is to ensure the property is well cared for, rent-ready and attractive for current and future residents. A property manager can help with these important tasks related to the physical property:
- Maintenance – this includes both preventive and routine maintenance in the areas of HVAC, gutter cleaning, exterior maintenance, animal-proofing, and landscaping, to name a few. The benefit of having a knowledgeable and trustworthy representative with regard to maintenance issues can be invaluable.
- Inspections – property managers regularly inspect the property. Inspections are a vital component of property management in these instances –
- Move-in/Move-out Inspections.
- Seasonal Inspections.
- Maintenance Inspections.
- Repairs – repair problems are typically unexpected issues that arise at any time of day. Repair issues can be identified by a resident or a visual inspection by the owner or their representative.
- Preparing the property for a new resident.
The challenges of managing a remote real estate investment are real but not impossible with the help of the right partner. Property managers are adept at managing the many moving parts required to properly maintain an investment unit, from resident negotiations, inspections, and the coordination of maintenance, to name a few.