In today’s competitive real estate market, it’s almost impossible to have too many skills in your personal portfolio. One trend we’re seeing is that people who can’t sell their homes are turning them into rentals. And investors are taking advantage of declining prices and low interest rates to snatch up potential rental properties.
So good property managers will be in demand in the days ahead. Perhaps property management is already a part of your company’s services. Or perhaps you have visions of starting your own property management company. In either scenario, you need some key skills that will set you apart from the competition.
- Have a marketing mindset
- Build good tenant relationships
- Understand laws, rules and regulations
- Provide meticulous records
- Keep properties in tip-top shape
- Be the ultimate professional
Have a marketing mindset
A property that’s standing empty isn’t earning an income for its owner. You’ll need to do more than run classified ads in the newspaper. Start with understanding the market you’re in and the properties you have to rent. Visualize the ideal tenants and know where to find them. Be sure you are on the radar screen of key area employers, as well as colleges, universities, and military establishments. Use the Internet and social media to provide visual images of your properties and regular market updates.
Manage rental rates with ongoing market research. Compare your rentals with similar ones in the area and determine the most competitive rents for your properties. Adjust the rates whenever leases expire. This will keep your rental properties attractive to potential tenants and assure that they remain profitable.
Build good tenant relationships
Building the tenant-manager relationship is an ongoing job. After all, it’s much easier to collect rent if you are on good terms with the tenants. They need to know you are there to serve them. First, you have to know how to find and screen tenants because a reliable tenant makes the difference between profit and loss. You must be able to smoothly and efficiently collect rent without alienating tenants.
Understand laws, rules, and regulations
No, you don’t have to have a law degree, but you do need to understand landlord-tenant laws and regulations. In many instances, laws tend to favor tenants, and failure to abide by these rules and laws will not only get your owners in trouble, it may also cost you and them, big-time. You need to understand the language of leases, and know the ins and outs of collection procedures, security deposits, and the eviction process. You need to know what constitutes discrimination and how to avoid it at all costs.
Provide meticulous records
You’ll need to be absolutely transparent with your accounting procedures and financial transactions. Making money in real estate is often a difficult and dirty business so your clients need to feel confident that you know how to keep the records clean. Set up good collection and accounting procedures and be willing to explain the ins and outs of how you handle money.
Keep properties in tip-top shape
Your owners/clients are concerned about one thing: preserving the value of their properties. Property management will be useless if the property itself is not in good shape. You need a database full of contractors and service people you know and trust. This includes plumbers you can call at midnight when the pipes break or the toilet backs up. You’ll need painters, electricians, landscapers, carpet cleaners, and more. Try to have at least two options in each category, in case the first person you call isn’t available on short notice. You’ll also need to be familiar with city permitting processes, codes, and other requirements for building improvements and exterior maintenance.
We’ve already talked about keeping meticulous records, and this concept is extremely important when it comes to property maintenance expenses. Your owners will want to know the details of your expenses, what you paid for, and what you got in return. You’ll need to agree on a dollar amount of expenses you can approve on your own, and when you need to call the owners for approval.
Be the ultimate professional
Property management is a profession, and you must be professional at it. In some states, you have to be licensed before you even begin. You’ll need to take classes (many of which are offered online) and take an exam. There are professional organizations, such as the Institute of Real Estate management (www.irem.org) that offer professional certification in property management (CPM). Having those letters after your name does carry some clout, especially in larger markets.
But more than tests and licenses and certificates, you need a professional, customer-oriented mindset. As a property manager you essentially have two clients: your tenant and your owner. If you can serve both with equal proficiency, you will be successful.