Apartment property management is considered the managing of a multi-unit rental property and the residents or tenants that occupy it. These properties can range from small multi-unit buildings to very large complexes housing hundreds of residents. Residential property management is a more industry used term and could include the managing of single-family homes as well as apartment complexes.
As you can imagine the managing of these types of properties can become quite complex and time consuming in comparison to managing a single-family house. Many owners of apartment buildings do not have the time, expertise or the desire to manage such on their own. In these cases, it is recommended to hire a qualified property management company that specializes in apartment property management.
Responsibilities of an Apartment Property Manager
Here are just a few apartment property management responsibilities that could be required of anyone managing an apartment building:
- Rent collection
- Showing available units to prospective tenants
- Credit and background checks
- Initiating lease contracts
- Monitoring and processing lease renewals
- Enforcing the rules of a lease contract
- Dealing with violators of a lease contract
- Handling an eviction from start to finish
- Mediator when feuds between tenants occur
- Grounds keeping
- Security and safety of premise
- All types of maintenance issues or repairs you could think of
- Knowledge of landlord / tenant law
- Knowledge of fair housing laws
Not ready to manage your Apartment Buildings Yourself
The good news is you can enjoy all the financial benefits of owning these types of properties but not have to deal with the managerial responsibilities of managing them. Some apartment building investors though may decide to take on certain responsibilities themselves. This is a great way to educate yourself, learn from real life experience the in's and out's of the real estate investing business and of course save some money. That being said, we highly recommend acquiring legal advice or counsel if you are unfamiliar with landlord / tenant and fair housing laws in your state and at the federal level.
Hiring an Apartment Property Management company
There are many management companies in your area who are well-qualified, licensed, and well versed in city, state and federal laws regarding the responsibilities between landlord and tenant. If you're ready to delegate the management of your apartment building today, we recommend interviewing several management companies. Having an apartment property manager on site at your apartment complexes is a good idea, especially when you cannot oversee the maintenance and renting business that comes with owning larger properties. Often, on-site apartment property managers that maintain apartments will be given their own apartment as part of their compensation.
Things to ask before hiring an apartment property management company
Experience – How long in business. Does the Management team have a proven system in place to streamline operations such as maintenance repair, timely statements, rental deposits, and communication channels? More companies are giving owners access to their property account information via a web site portal. Here you can view your statements, any repair items or rent deposits..etc.
Credentials – Does the Apartment Property Management team possess all licenses or certification required by state law? Unfortunately every state licensing requirement is different. We always recommend using a licensed Property Manager for all your rental property needs whether state required or not.
What percentage of their management portfolio are apartment complexes. If 90% of their portfolio is managing single-family homes, you may want to consider hiring one with more experience in managing larger multi-units.
Get references – Always ask for a current list of properties they manage (do some drive-by's) and talk to other property owners who are their clients.
We suggest hiring a local real estate lawyer to review the Manager / Owner contract and the Landlord / Tenant contract. And don't be afraid to request changes be made if necessary.
And go over all the fees involved in the management of your property. Set up fees, lease renewal fees, do they impose a mark up fee for service / repair calls etc. Find out what their cancellation policy is too. Once you think you've got all your questions answer, then ask this one "Are there any other fees I should know about that we have not discuss that may affect me?"
Investing in apartments for cash flow
Investing in apartment buildings is a great way to build your real estate wealth. Typically these types of properties do well for cash flow to the investor versus single-family houses where you may see appreciation in value more common. When qualifying these types of properties for your portfolio you will want to take into account the passive income that will be generated along with the expense ratio. It's all about the numbers. A good apartment property management company should be able to help you in your decision-making.