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Explore How a Property Manager Can Help You in Boston, MA
Taking care of multiple properties, whether residential or commercial, can be time-consuming and stressful. Not every landlord needs to use property management services, but those who have several properties, or a portfolio of properties across several Boston-area cities, may find that hiring a property manager makes sense financially and in practical terms.
What Is a Property Manager?
Property managers deal with prospects and tenants. Their services can range from marketing a property and vetting prospective tenants to collecting rent, dealing with any required maintenance and repairs, and handling issues with arrears and evictions.
Who Needs a Property Manager?
You may find it beneficial to hire a property manager if you have properties on both sides of the Charles River or spread across different areas of Greater Boston. Traveling to collect rent and deal with minor tenant issues takes time away from other tasks, and a property manager could help you stay on top of things as your portfolio grows.
You may need a property manager if:
- You have a large number of properties spread across the city
- You live far away from the properties you own
- You have a lot of units to manage
- You've acquired property but have little experience managing it
- You have commercial properties with complex maintenance needs
Choosing a Property Manager
Property management services vary significantly in terms of what they offer and their pricing structure. If you've decided to find a property manager, you should take some time to shop around. This is true for both residential and commercial property management. Don't simply search for "commercial property management near me" and go with the company at the top of the results.
Consider what you want your property manager to do, whether you need an assistant property manager, the size of your portfolio, and your budget.
Questions to ask a property manager
Your property manager is going to represent you in your dealings with current and prospective tenants. This means it's important to find a property manager you can trust to act as your representative.
Before hiring a property manager, consider asking some of the following questions:
- How much experience do you have with the kind of properties I have in my portfolio?
- What services do you provide?
- What is your pricing structure?
- What insurance do you have?
- How will you market my property?
- What screening process do you use for prospective tenants?
- How do you value properties to calculate rent?
- How do you collect rent and handle arrears?
- How are property repairs handled?
- How often will I be updated on the status of my property?
- What happens if I wish to sell my property?
Understanding property management fees
The way property managers handle fees can vary significantly. Some property management companies charge a flat fee per property, while others charge a percentage of the rent they collect. Some companies have tiered pricing and charge a smaller percentage for landlords with several properties in their portfolio.
Remember that your property may not always be occupied. As of August 2020, the average rental vacancy rate in the United States is 5.7%. Ask each prospective property management company if they offer a discount for vacancies.
Property manager skills
Property managers typically charge fees of between 5 and 12% of your monthly revenue. A good property manager should pay for themselves many times over by saving you time and making you more money.
Your property manager should help you with the following:
Help finding tenants
Filling property vacancies is one of the most important jobs of a property manager. Finding suitable tenants for apartments or a commercial property takes time. While it's likely that any for-rent ads will get a response, not all tenants are desirable.
A property manager should do the following:
- Evaluate your property and set an appropriate level of rent
- Advertise the property in suitable places
- Respond to calls from interested tenants
- Arrange viewings
- Perform background and credit checks on applicants
- Comply with fair housing laws
A property that's sitting empty is an unnecessary expense for any landlord. Not only are unoccupied properties not generating income, they could be a security or safety risk. Empty properties may attract vandals or squatters and could also require extra maintenance or repairs if left unoccupied for extended periods.
It's important to fill empty properties promptly and have someone check on vacant properties regularly to make sure they remain in good condition.
Property managers who are paid a percentage of the rental income have an incentive to fill vacancies in a timely fashion with tenants who pay their bills promptly. This means they're unlikely to waste time finding new tenants when a home or apartment on their books is vacated.
Use this to your advantage, and look for a reliable local property manager who has a track record of filling properties. An established and reputable property manager should have a good database of properties and tenants. Many families stay with the same property manager as their family (or income) grows.
Collecting rent
Filling vacancies is an important step, but the work does not end there. Once a tenant has moved in, a property manager will collect rent from them and keep track of ongoing payments.
While this may not sound like a major concern if you have just one or two properties, for someone with a much bigger portfolio, having all of your payments handled by a third party can make life much easier.
A property manager will keep track of incoming payments, handle deposits (and refunds at the end of a tenancy), and also monitor tenants who fall into arrears.
Landlord/tenant laws can be confusing, and a property management company can help you manage your tenant relationships in a way that is assertive yet compliant with the law. This means collecting arrears and starting eviction processes when necessary and protecting your financial interests while respecting the legal rights of the tenants.
In an ideal world, you would never need to chase a tenant for arrears or start eviction proceedings. Should a tenant fall behind on payments, however, you will need to follow due process to collect those missing payments and evict them.
Your property manager will ensure that tenancy agreements, contracts, and other paperwork are all in place and will make sure that should your tenant end up in arrears, the paperwork is in order to evict them.
Property maintenance and repairs
As a landlord, you have a responsibility to ensure that your properties are in a good state of repair. Under Massachusetts law, landlords must provide habitable premises, and there are requirements for accommodation standards, maintenance, and the timeliness of repairs.
If you're new to being a landlord and don't have a lot of property maintenance experience, keeping up with the maintenance and repairs on even a small number of properties may be a challenge.
Even experienced landlords can struggle with bigger property portfolios or when they add commercial properties to their list.
Landlords who have a significant roster of revolving tenants, such as those who manage properties in areas with substantial student populations, may find the burden of dealing with end-of-tenancy repairs and cleaning to be too much for them.
Property managers ease this burden by either carrying out these tasks or contracting with a third party to handle them. They also inspect properties, perform routine maintenance, and deal with returning deposits when tenants move out.
On-site property management
Property managers are useful for landlords who own a lot of properties spread across a specific geographic area. They are even more useful for landlords who own apartment complexes or other multifamily properties.
Some landlords get their start by purchasing a multifamily property, living in one unit and renting out the others. This arrangement can work for someone early in their career, but as a landlord becomes more established, one of the first steps they often make is to move away from their tenants.
Being constantly available to tenants is not always a good idea. While there are some perks to being close to your tenants, since you can keep an eye on the property and make sure that the tenants aren't abusing it, many tenants struggle with boundaries and may try to pull their landlord into personal troubles, disputes with neighbors, or even financial issues. Some landlords find it hard to evict a tenant who has been using them as a shoulder to cry on, for example.
Using an on-site property manager gives you the best of both worlds. The property manager can act as a caretaker, looking after the complex and dealing with day-to-day issues. Since caring for the property is their job, and they have a boss to report to, maintaining boundaries is easier.
As a landlord, you get the peace of mind of knowing there is someone keeping an eye on the property at all times. Your tenants feel looked after because they have someone to contact when they have questions or issues, and you're free to focus on growing your portfolio instead of micromanaging a few properties.
What to Look for in a Property Manager
There are more than 280,000 property management companies in the United States, so it's clear that there's a demand for the services they offer. Not all property managers are suited to all landlords, however. Consider the following when choosing your property manager:
- Pricing: Run the numbers for your property portfolio based on flat fees and as a percentage of revenue. Which works best for you?
- Expertise: Is your portfolio residential, commercial, or a mixture of both? What does the property manager usually focus on?
- Demographics: If you're renting out student apartments in Jamaica Plain, you'll want a property manager who has experience with that demographic. In contrast, if you're renting high-end units in Back Bay, you may need different marketing expertise.
- Services: Do you need help with administration, maintenance, or both? If you want to do your own repairs and just need someone to fill the properties for you, you may not need a full-service property manager.
- Contract terms: Some property managers want you to go through them if you decide to sell your property or expect you to stay with them for a specific period. Be sure you understand the terms of the contract before you commit.
- Reviews: Tenants do their homework before renting a property and some property managers can get a reputation among locals. Working with the wrong company could harm your chances of finding quality tenants.