Residential Property Management: Step by Step Guide - New

For many real estate investors, the selection and purchase of a property is just the first step in their journey. Doing the research, looking at places and making bids can seem like a lot of work but what makes the difference is how you decide to manage your new properties.

In my experience, many investors prefer to simply outsource their residential property management to a third party, which is a completely reasonable thing to do. It can reduce the number of headaches that you have to deal with and can lead to happier tenants.

For other rental property owners, the responsibility of residential property management will fall back on them as landlords. They’ll be the ones called if the hot water gets shut off or if the power goes out and should be prepared to know what to do. For investors who don’t mind this aspect of real estate, doing it yourself can save money.

However, before we get started, if you are looking to expand your investment portfolio and buy new rental properties, my team and I have the solution for you. We understand that every investment is different, so we want to help you strategize and coordinate your financing to maximize your investment success.

Simply book a call with us today and we will help you maximize your rental property portfolio and future purchasing power.

Property Management Solutions

When it comes to residential property management, there are a few different options for you to keep in mind. Remember that each of these solutions come with their own merits and advantages, so pursue whichever one works best for your portfolio and investments.

Outsourcing your residential property management

If you are planning to outsource your residential property management, the most common way to do so is through property management company. There are property management companies for all sorts of real estate investments. While some specialize towards one type of real estate, there are plenty of companies that will assume responsibility for both residential and commercial property management.

Alternatively, if you have a relatively small portfolio or are looking to outsource your property management for a small selection of properties, you can also employ an individual property manager to handle the job alone.

I know personally, my property manager is one of the most valuable members of my real estate investing team. Their expertise in financial management, building operations and emergency repairs buys me time to focus on my other responsibilities without worrying about whether my tenants and properties are being properly cared for.

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Tackling Your Own Residential Property Management

Often if you are just getting started as a real estate investor, or if you have a smaller portfolio that does not require outsourcing, you may find yourself responsible for your own residential property management.

In this case, the role of property manager falls to you as an investor. This is the landlord lifestyle that some investors enjoy. However, this lifestyle is not for everyone - especially if you have a full-time job outside of your investments.

Property management is a major time commitment and unless you are a full-time property manager, most people do not have the time to do it properly. So, you should not feel ashamed if you find yourself needing to rely on a third party to manage your investments.

Becoming a property manager

If you have expertise in building operations, financial organization, and tenant communications, you may want to consider pursuing a career in property management.

As a property manager, you can choose to specialize in certain types of properties, or to act as a jack of all trades and work with a variety.

When you are getting started, there are a variety of start-up funds associated with starting your own property management enterprise, so be sure that you have some money on hand or can arrange some sort of loan if you want to dip your toe into these waters.

Understand the Required Skillset

Property managers require a suite of both hard and soft skills that other jobs do not require, so you want to take a close look to determine where you excel and where you need help.

Managers should have good people skills to help them build up trust and rapport with tenants, law enforcement, vendors and maintenance contractors in their areas. They should also constantly be looking to network with vendors and contractors since these connections can help save valuable dollars and cents for property owners—an attractive quality for them to notice.

This is not to say that property managers should be expected to outsource repairs to maintenance contractors regularly. On the contrary, property managers should be expected to perform regular maintenance and minor repairs consistently. Most property owners will quickly grow tired of a manager who needs to spend hundreds of dollars every time a faucet leaks or a toilet clogs.

Meanwhile, as a property owner, your job is to learn when to delegate tasks to your property manager and when to step in and handle things yourself.

Who is responsible for certain residential property management tasks?
A Chart Outlining Who Is Responsible for Various Property Management Tasks

Evaluate your finances

Naturally, when you go to hire a property manager, you need to make sure that you can afford to do so. Fortunately, there are a variety of pay structures that property managers follow that you can choose from.

For some property managers, they are content with receiving a dedicated percentage of the rental income on the properties they manage. This is most common amongst independent property managers who are only tasked with a handful of units. Meanwhile, other property managers may work for a dedicated salary or hourly wage. This is commonplace amongst larger property management companies and managers tasked with caring for more intensive properties such as an apartment building or multifamily property with communal areas.

Naturally, hiring a property manager is going to cut into your cash flow, but if you hire a qualified expert, the value they will bring to your portfolio will more than pay off in the long run.

Meanwhile, if you are looking to free up money in your budget to hire a property manager, give me a call. My team and I are more than ready to help you rework your mortgage financing to try to maximize your cash flow and increase your property management budget so that you can afford the best manager for your investment properties.

Important Questions to Ask A Prospective Property Manager

Much like how you need to screen prospective tenants to make sure that you are only accepting the best tenants into your property, you should screen property managers in order to make sure they will take the best care of your property possible.

Here are some important questions you should as a prospective property manager before hiring them to take care of your residential investments.

  • How Long Have You Been a Property Manager?
  • What Types of Properties Have You Managed Before?
  • How Many Properties Are You Currently Managing?
  • Do You Work Independently? Or Are You Part of a Team?
  • Could You Describe Your Workflow?
  • How Often Would You Be Available For Tenants to Contact You?
  • How Do You Manage Tenant Screenings?
  • What Is Your System for Tenant Communications?
  • How Do You Manage Tenant Complaints?
  • What Percentage of Your Tenants Renew Their Leases?

These questions should provide you with a clear image of your property manager's professionalism and workflow so that you can determine whether they fit your investment style.

Finance Your Next Residential Real Estate Investment

If you are looking to invest further into residential real estate, let me help you. My team and I at LendCity are proud to dedicate ourselves to helping investors like you get the best available rates for your investments so that you can spend more time working on your portfolio and less time crunching the numbers.

To get started today, book a call with me and my team to start building a strategy make real estate investing a little more manageable.

Is Hiring a Property Management Company Worth the Expense, With Scott Dillingham