Answering the question about what property managers do is not difficult; property managers oversee the operation of a rental property on behalf of the property owner. What may not be so easy to explain is the full breadth of what this task entails.
Property management is a highly diverse profession. At various times, property managers wear the hat of a handyman, accountant, lawyer, salesperson, digital marketer, private investigator, and a lot more.
Below we take a close look at what property managers (PM) do and how teaming up with an insurance broker can help a property manager make more money.
The responsibilities of a PM can be sorted into three categories: building maintenance, financials, and managing personal relationships.
The PM keeps the building’s physical structures, systems, appliances, and other content in good condition. Building maintenance includes routine or preventive maintenance, repairs or replacements, regular inspections, and managing vendors.
Property managers create the budget for the property in conjunction with the owner. They are responsible for making sure the cost of managing the building stays within budget. Essentially, the PM makes the rental profitable by keeping expenses low.
The PM is responsible for marketing and advertising the property. They use tools like MLS (multiple listing service) websites, social media marketing, and their personal network to find quality tenants and reduce vacancies in the property.
Property managers have to ensure the renters they lease a property to do not turn out to be problem tenants. They do this by running background checks (renting history, personal records, and financial status) on potential renters.
Property managers usually understand the rental property market better than the property owner. They know the rental rate for different types of homes and when those rates change. This puts the PM in the best position to determine the rent.
Collecting the rent in a timely fashion is one of the most important roles of a property manager. Delayed rent payment is easily the biggest headache of landlords. Property managers know how to navigate this issue.
In addition to the rent, property managers collect other fees. They are responsible for disbursing these funds to the owner, the rental business, or an escrow account. Property managers also maintain the financial records for the rental.
Property managers help tenants understand and abide by the terms of the lease. They make sure the lease is comprehensive and fair to all. They enforce the rules and handle all violations of the agreement.
Property managers create systems for tenants to quickly and easily report any issues they have. The PM ensures tenants’ complaints are dealt with speedily and thoroughly. In a multi-family dwelling, the PM also manages conflicts between tenants.
If the relationship with a tenant breaks down irreversibly, the property manager is responsible for evicting them from the building. They have to ensure that the eviction process is done according to the relevant laws.
The PM operates the rental property in accordance with local regulations. It is the responsibility of the PM to avoid lawsuits, as well as, shield the property owner from any legal issues.
The property manager helps the owner maximize profits by advising on ways to reduce the amount they pay in taxes. The PM helps the owner get the most out of tax deductions.
To make their work easier and the property they manage more profitable, property managers need to build mutually beneficial partnerships with non-competing businesses like insurance brokers.
Building a partnership with an insurance broker can benefit a property manager because insurance brokers and PMs often provide different services to the same sets of people. The broker and PM can refer clients to one another’s businesses. For instance:
Insurance brokers can link property owners to competent property managers. The broker not only wants his/her client to have the best insurance coverage, but they also want to minimize the possibility of claims. Helping the client find a property manager who will keep the building in top shape is in the broker’s interest.
At the same time, the property manager can be sure of a flow of new clients to their property management business. Furthermore, these will be qualified leads; property owners who are actually searching for a reliable property manager.
Lastly, the property manager has renters and property owners who need renter’s insurance or other types of insurance. The property manager can partner with an insurance broker to offer good deals to these renters and property owners.
Partnering with an insurance broker will let a property manager offer more benefits to their clients and tenants. This can help the property manager’s business grow.