Fedoras, Babushkas, Yarmulkes, Bonnets…wait…
Becoming a landlord isn’t for the weak of will or the faint of heart. Late night maintenance calls, knotty legal issues, abusive tenants, and immense amounts of detailed and meticulous paperwork are referred to as “last week.” And as part and parcel of the process, your clients — the owners whose property you manage — often assume that all you do is collect rent and turn it in.
That, however, isn’t really management; it’s just administration. If you really want to manage a property, your goal has to be to maximize your client’s return on their investment. The greater the RoI you provide, the more your services are worth and the more clients you’ll gain from word of mouth and good reputation going forward. That’s the mark of a property manager’s real success.
A successful property manager must be (or have on staff):
A marketing expert, to attract qualified tenants to investigate the property,
A private detective, to separate out the potential troublemakers from the low-hassle tenants,
A property inspector, to identify problems with a structure that must be resolved before it’s ready to rent out,
A customer service representative, to handle tenant complaints graciously,
A handyman, to resolve maintenance issues,
A landscaper, to maximize the curb appeal of each rental building,
An accountant, to handle the inflow of rent, the outflow of necessary expenditures, and the tracking of several financial variables including the owners’ RoIs
A manager, to keep track of the workload and functioning of all of the various people who work for him taking care of all of these other details,
A marketing expert (again!) to attract more valuable owner-clients to manage the properties of,
A lawyer, to handle all of the various real estate, premises liability, landlord-tenant, and other legal issues that come with owning property that other people live on as well as Fair Housing laws,
A risk management expert, to minimize the impact of unlucky events on the property, the tenants, and the owner’s RoI,
A leader, to inspire loyalty and performance from both tenants and underlings,
[*]And quite likely a few more hats that are slipping my mind at the moment.
Which of These Should You Hire vs. Doing Yourself?
There’s no clear answer to that question; if you’re a new property manager, the answer is almost always ‘do what you know how to do, and hire people to do all the other parts.’ In the case of Royal Rose Properties, I consider myself primarily a leader, a manager, a marketing expert, and a risk management expert. I don’t even do 100% of those jobs myself; I have people who help me with insurance and people who help me put together advertisements. I also have several people who work for me doing things like inspecting properties, handling legal issues, interfacing with irate tenants, and so on.
Your skillset is probably different from mine. If you enjoy working with people to solve problems, you may want to be the ‘face’ of your company to the tenants and owners, and you may choose to hire someone to organize your marketing campaigns. That said, you should be at least prepared to step into any of these roles at any time, because you never know when any one of your underlings is going to end up in the hospital or otherwise unavailable unexpectedly.
What Roles Do Property Managers Always Have to Play Themselves?
That question is much more straightforward to answer: a property manager must always be a leader and a risk management expert. Even being a manager can be outsourced, but having the vision to see what might be done to improve a situation (being a leader) and having the wisdom to minimize catastrophic losses (risk management) — both of those things are simply too important to hand off to someone else. If you can’t do those two things, please forgive the honesty, but being a property manager just isn’t for you.