Author: MerGo Group

What does a rental property manager actually do?

We often talk about the different aspects of “rental property management” and “multifamily property management,” but we’ve never taken the time to clearly outline all of the responsibilities of a property manager in one place.

Until now.

If you’ve ever been curious as to what a property manager actually has to deal with on a day-to-day basis (or a lease-to-lease basis), this post will cover all the basics. 

Setting and reviewing the rental price

We shouldn’t have to explain why this is important, but we’ll do it anyway. Rental property owners want to make the most money possible off their properties—which is why we do extensive research on each property to find the maximum possible rent price. We set this in the beginning and then revisit it every lease cycle to ensure the price accurately reflects the value of the home. If a rent increase is needed, we’ll reach out to the tenants and get it taken care of.

Making initial repairs

Before a home is rented, everything needs to be in working order. And while “working order” can mean different things for different people, for us it means double-checking everything in the house—from kitchen appliances to windows, heating systems and more—and ensuring they’re up to our specifications. Even the stuff you don’t see (like insulation, plumbing, and issues with rot or mold) is checked before a new tenant comes in. We do this the first time we rent a property as well as in between all lease cycles, so every new tenant starts with a clean slate.

Collecting rent

No one wants to be the bad guy, but sometimes it’s necessary. And that’s what a property manager is for—we’re the ones collecting rent, and we’re not in the business of letting late payments slide. Being strict is the name of the game here, and we’ll do what needs to be done to ensure rent is paid on time for all of our property owners.

Evictions

Even though we do our best to get qualified tenants in all of our properties, issues can (and likely will) occur from time to time. If a tenant needs to leave, they need to leave—and that means an eviction. While we don’t find ourselves needing to evict tenants regularly, we do have experience with it. A bad eviction can result in a ruined house and significant loss of revenue for the property owner. We do our best to ensure evictions go smoothly, so our properties stay in good shape and our owners get paid. (This is far easier said than done, but we’ve learned a thing or two over the years.)

Checking in on properties

A lot of property owners think that once they find a few good tenants, their job is done. If only the world worked that way. 

One crucial job of a property manager is to schedule routine visits to check in on all of their properties. Even if you have great tenants, it’s impossible to know what’s actually going on in the house without checking for yourself. We’ll do routine visits a few times a year to make sure the property isn’t in disrepair or our tenants aren’t up to anything illegal. This alerts us to any potential issues before they become a major problem, and it also lets us establish a friendly rapport with our tenants.

Routine maintenance

When most people think of property management, their mind immediately goes to maintenance. And it’s true—a big part of our job is fixing routine problems that pop up in the properties we manage. Maintenance is something we take pride in because we have fast response times and we handle all maintenance requests with care and efficiency. But to be clear, this involves more than just fixing a leaky faucet here and there—it means developing relationships with contractors, forecasting maintenance costs for all your properties, and developing a system for intaking, processing, and resolving maintenance requests.

Financials

Property owners need to keep track of all the financial data related to their properties—like expenses, revenue, profit, and loss (plus a whole lot more). As property managers, we take care of all that stuff so the owner can rest easy, knowing nothing will fall through the cracks. We also work with accountants to ensure everything is in order before tax season hits.

So there you have it! These are the primary responsibilities of a property manager. If you currently own property and have someone managing it, they should be covering all of these duties at a bare minimum.

In reality, we do a lot of things outside of these core tasks—but for the most part, this is what every property management company should be handling. When it comes to commercial real estate and multifamily properties, things get a bit more complicated.

Don’t think your property manager is handling their core responsibilities as well as they could be? Give us a call or send us a message. We’ll fill you in on our process and see how we can help.

The key to getting a lucrative return on your investment property is simple: Treat it like a business! (Because it is a business!)

The number one mistake we see first-time real estate investors make is that they treat their investment property as a hobby. They act like it’s just another line item in their portfolio, and they end up running into major issues down the line.

The reality is that owning and managing an investment property can be a lot of work. It’s not as simple as buying a mutual fund—there’s a lot of red tape, legal issues, and even physical labor involved. And just like any other investment, there are inherent risks.

The key to avoiding those risks and getting the best return on your investment is to run your property like a business. Here’s what we mean by that…

The legal issues

There’s far more to managing an investment property than finding a tenant and collecting a check every month. The reality is that if you try to cut corners, it will almost certainly come back to haunt you—we’ve seen it happen more times than we can count.

The most pressing issue when you first start out will be getting legally compliant. There are a lot of legal documents you need to have in place for an investment property. If you think you can skate by without these, you’re going to be in for a rude awakening. 

Just as an example, here are a few of the documents you need to have right off the bat when running an investment property in Massachusetts:

A proper lease (written by a lawyer or a real estate professional!)

An apartment condition statement
A rent security deposit receipt
A mold addendum
A property addendum

If you don’t have these documents, you’re putting yourself at serious legal risk. It goes without saying, but the legal issues you’ll face from this will punch a massive hole in your returns (or put an end to your real estate career before it even begins).

But those are just the forms… There are many other legal issues you have to deal with when running an investment property. 

You need to make sure you’re not discriminating against prospective tenants, which is actually more complicated than it might sound. You may technically be discriminating against someone without even knowing it. If you’re not aware of the laws around this, it can be a simple mistake that will lead to disaster.

You also need to be extremely careful with how you handle security deposits. There are many laws around what you can do with security deposits, where you can hold them, how much you can take out and for what, and what kind of interest you need to pay when returning the deposit to your tenants.

If you’re not 100% clear on any of these legal issues, your investment property faces serious risks. 

Creating processes

Every business has processes. You could argue that any business is simply a collection of processes—and property management is no different. We have hundreds of systems and processes in place to help us efficiently and effectively manage all of our properties.

If you want your investment property to be successful, you need to have certain processes in place. You can’t just expect that things will “work out” on their own.

Tenant screening is a classic example. People who are new to property management will often go with their gut, picking a tenant just because they “have a good feeling” or they were referred by someone trustworthy.

There’s certainly a time and place for a gut check when screening tenants, but there are a lot of other things that need to happen first. You need to be running credit checks, establish a credit minimum, follow up with multiple references… And more importantly, you need to have a system for making sure all of that stuff happens efficiently so you can get the right person in the door quickly.

Tenant screening is just the beginning, though. You’ll need to have processes and systems for taxes, bookkeeping, rent collection, the list goes on… 

If you’re expecting to simply buy an investment property and receive a check in your mailbox every month, it’s not that easy. There are a lot of things you’ll need to put in place before that happens—and even if you do get started without these processes, you’ll need to get them in place if you want to keep things rolling.

The lesson

We don’t like scaring people away from investing in real estate, but we’ve seen our fair share of horror stories. If you’re interested in managing your own property, you need to make sure you cover all of your legal bases and get at least a barebones set of processes in place to make sure things are running efficiently.

If you find yourself needing help or you feel like you’re in over your head, just get in touch. This stuff is our bread and butter—as a full-service property management company, we handle everything from tenant screening to legal documents to rent collection. 

But either way, the lesson here is simple. Run your property like a business and you’ll get paid like a business owner. Run it like a hobby, and you’ll regret ever investing in real estate.

Over the past several weeks, we’ve found ourselves in truly uncharted territory. Nearly everyone around the world has had to make significant changes to their daily lives to combat the spread of coronavirus and, for many of us, the economic implications are just as severe.

We’ve had a lot of landlords asking us for advice on how they should handle this crisis. There are a lot of uncertainties for landlords right now. We’re all asking ourselves questions like:

What if my tenants can’t pay the rent?

What if they get sick?

What if I need to show a property?

What if I need to evict someone?

These are all real fears, so we’d like to take some time to address them. Here is our best advice for landlords during these trying times.

Communication is key

The first thing you should do to alleviate any issues related to the coronavirus is to simply communicate with all of your tenants.

If you’re like us, you’ve already received close to one hundred emails from various companies about the coronavirus crisis—and you probably don’t care about most of them. But this is likely the one email that your tenants are anxiously awaiting.

Whether it’s a phone call or an email, be sure to reach out to your tenants as soon as possible to let them know you’re aware of the situation, you understand there may be complications, and you’re doing everything you can to make sure everyone gets through this crisis.

And we shouldn’t have to say this, but please make sure your tenants are all safe and healthy before harassing them about rent! You may also want to share some best practices for avoiding infection and keeping your tenants safe. The World Health Organization is always a reliable resource to consult.

The rent question

This is the one we’re all worried about. What happens if my tenants lose their jobs and can’t pay the rent?

This is a difficult situation for landlords to navigate, and the first thing you need to do is accept the fact that rent might not come in on time. Hopefully, you have a nest egg built up for situations just like this—and if not, let this be a lesson!

As mentioned above, we’d recommend first reaching out to your tenants to see if they are anticipating any problems with paying rent. Don’t offer a solution at this point—just wait for their response and then act accordingly. 

The reality is that you have every right to request that rent be paid on time. However, that may not be the greatest move. It’s very unclear at this time, but landlords may be unable to evict tenants in the immediate future—and the idea of evicting a tenant, cleaning a property, and finding new tenants during a pandemic doesn’t sound all that appealing.

With that said, here are a few options to consider if you are having trouble with your tenants paying rent:

Offer to forgive late fees.

Postpone when rent is due.

Offer a payment plan.

Offer to lower or remove rent increases if they keep payments on time.

Offer various tasks or jobs they can do for you to lower rent payments.

If a tenant tells you that they are truly unable to pay the rent, you are well within your limits to request documentation for their loss of income and documentation proving they have no additional funds to pay you.

Our best advice is to work with your tenants during this time. Be considerate of the problems they’re facing and do what you can to come to a mutually-beneficial agreement.

If it means missing a mortgage payment, so be it—there are many efforts coming down the pipeline for mortgage and debt relief. If you’re barely able to make a mortgage payment, you may be better off saving your money for your own needs and any essential repairs that might come up.

Maintenance

Another question many landlords have right now is how to deal with maintenance issues. If you’re handling maintenance yourself, you don’t want to be going into people’s homes and getting infected. And if you’re dealing with an outside vendor, they may be reluctant to do this work as well.

The simple answer is that all non-essential maintenance fixes should be postponed until after the crisis has dissipated. Your tenants can live with a squeaky door or a dripping faucet, but serious issues like leaks and heating problems will still need to be addressed—there’s just no avoiding it.

This is, again, something you’ll want to communicate to your tenants as soon as possible!

Cleaning

For landlords that own multi-family properties, we highly recommend increasing the frequency of cleaning for common areas like hallways and stairways. If possible, consider sanitizing commonly-used surfaces like door handles and mailboxes daily or every other day to minimize the spread of infection amongst your tenants.

If you are cleaning these areas yourself, be sure to wear protective equipment like gloves and masks to minimize your chance of infection. And just like everyone else, be sure to keep yourself safe by washing your hands frequently and practicing social distancing!

These are tough times for everyone, but they’re especially tricky to navigate as a landlord. If you have further questions or you need assistance during these times, please get in touch. We’d be happy to help however we can.

What will you do if your tenants don’t pay?

How can you make sure your insurance policies and leases are up-to-date on current laws and protect you from potential lawsuits?

How will you screen tenants and coordinate advertising, reference checks, key transfers, and walk-through inspections?

Who’s going to keep an eye on your property to catch potential maintenance issues (like that pipe that’s ready to burst) early on?

As many people seem to find out the hard way, there’s a lot that goes into managing a property – it’s far more than simply dealing with the occasional clogged toilet, lost key, leaks, or late rent payments.

That said, not all types of property owners are at a point when they’re ready for a property manager. To see if a property manager is a good fit for your property, take a read through the “10 ways to know” list below.

Important note: not all Boston area property management companies will offer help for all the items below (for example, some management companies really only offer maintenance and rent collection). So if any of these items seem important to you, make sure to check if the property management company you’re looking at actually offers it as a part of their service.

10 Ways to Know If You Need a Property Manager in Boston
You might need a property manager if you want to…

1. …avoid those Friday night emergency maintenance calls from worried tenants about no hot water, leaking pipes, or clogged toilets.

Many people turn to property managers in the first place because they want someone to take care of maintenance issues for them. Generally, not only will a property manager be responsible for responding to your tenant’s plea for help, but also for arranging, meeting, and scheduling the relevant service from plumbers, roofers, maintenance staff, cleaners, etc.

Beyond this, they’ll often deal with unit turnover, cleaning, and repairs after tenants are gone.

And as a bonus, since most property managers will have a regular set of vendors they turn to, they can usually get help out to your tenants far more quickly than you would be able to as an individual owner.

2. …get insight into the best ways to optimize your property so you can earn as much on it as you can.

A good property manager will also have expertise in your area’s market so they can make sure you’re getting market rate.

Additionally, by visiting your properties physically and using their knowledge of the market and what has worked for their other owners, they should be able to give you suggestions for ways you can improve them and increase their value.

3. …quickly fill vacancies and have help finding and screening reliable tenants.

Of course, one of the biggest challenges any landlord faces is finding good tenants who will pay rent on time and take care of the property.

Luckily, many property management companies offer support in helping you fill vacancies, and should have a strong process in place for screening tenants to make sure they are a good fit.

One thing to keep in mind – it’s very much in the property management company’s interest to find you a good tenant! After all, if the tenant turns out to be difficult, it’s going to be the property manager that now has to deal with them, not you.

4. …have some preventative maintenance checks that catch problems early and make sure your property is always in great shape.

Whether it’s making sure you don’t forget to change the air filters every few months, or just knowing someone has eyes on your property to find and take care of problems before they become serious, this preventative maintenance can be a major relief both in peace of mind as well as for your wallet.

5. …pass along the responsibility of tenant communication.

Beyond just maintenance requests, you’d be surprised by how many inquiries tenants have and how much time it can take you to handle them all! Questions about renewals, other properties available, how to use their garbage disposal or their heat/AC, disputes with neighbors, delays in their trash pickup…the list goes on.

Just about any property management company out there will take full responsibility for all tenant communication and become your tenant’s point of contact.

6. …be 100% sure that all your leases and legal documents are up-to-date and in accordance with the current laws.

Unfortunately, it’s harder than most landlords might expect to get their legal docs in order and air-tight against lawsuits or broken leases (in other words, just pulling a template from Google usually doesn’t cut it).

Many property management companies will not only handle the review and signing of leases with the tenants, but also ensure they are fully up-to-date and reviewed by their lawyers.

7. …give your tenants access to streamlined systems to pay rent and make maintenance requests.

One of the biggest benefits of working with a property manager is that they have better, more efficient systems than a solo, self-managed property owner might have.

For example, instead of making the tenant call you directly to make maintenance requests, a property manager will often have their own online portal where tenants can submit them in minutes.

Naturally, this also means they’ll have better, more efficient systems for the landlord as well when it comes to things like financial and maintenance reporting.

8. …have someone take care of all bookkeeping, accounting, and rent collection.

Dealing with the financial side of being a landlord isn’t only time-consuming, but prone to errors.

And this is where property managers can give you serious peace of mind – by taking care of everything on the financial side of things (including delivering a complete 1099 for you at the end of the year with your investment earnings), all you’ll have to do is keep your eyes out for the rent payment landing in your bank account each month.

9. …guarantee that you’re not overpaying on insurance and maintenance, nor undervaluing your property.

There’s a lot to keep in mind and consider as a landlord, and these are just a few of them.

Ideally, a property management company will be partnered with the experts needed to look at your insurance and maintenance costs and see that you’re paying fair prices for them. Beyond this, they should be familiar enough with the Boston market to ensure you’re charging the right rent price and thus getting the full market rate for your property.

10. …make your property truly become a hands-off, passive investment for you to benefit from in the long term.

Put simply, a good property management company will take care of everything related to your property – allowing you to skip out on the stress of tenants and the evenings taken away from your family, other life commitments, or even vacation to deal with it – so truly all you have to do is decide what to do with the rent payment that’ll be hitting your bank account each month.

How do you find a property manager in Boston that offers everything above?

As we’ve said, not all (or even very many) property managers in the Boston area will offer all of the items above.

That said, here at MerGo we do offer our property owners all of these things (as well as a few extras).

To learn more about how MerGo can help you turn your property into a truly passive investment, head to the Our Service page.

As a landlord, maintenance requests from your tenants can be frustrating, time-intensive, and expensive to deal with. Worst of all, they seem to happen at the most inconvenient times—and often need to be dealt with immediately. It’s one of the most common reasons why many landlords will hire a property management company.

That’s why we’ve refined our process for maintenance requests to ensure all of our managed properties are in perfect shape. Handling these issues promptly and correctly keeps everyone happy.

So let’s take a look at how our process works and why maintenance is so important in property management.

Digitizing Maintenance Requests

When you’re managing a single property, maintenance requests via phone call or text are easy  enough to keep track of. But when you’re managing hundreds of properties, you need a system to keep things organized so that every request is routed to the right person and the job gets done on time.

At Mergo, we use an online tenant portal where tenants are able to submit maintenance requests digitally. These get filed in our system so our team can analyze the request and send out the right vendor to take care of the job.

We understand that tenants want to know what’s going on with their request, so we keep them in the loop throughout the entire process by sending them details on who is coming, when they’re coming, how they’re going to fix the problem, and any other information they might need. Then, we send a confirmation when the job is done.

Thanks to this system, we’re able to process large volumes of maintenance requests quickly and efficiently. And because most of this is done automatically and we’re not spending time manually sorting through requests, talking to vendors, and tracking down information, we can keep costs low for our owners.

Addendums and Yearly Checks

While maintenance requests are great, they only work if tenants actually submit them. We want to hear about maintenance issues right when they happen so they can be fixed correctly, which is why we have uniform addendums for all of our properties that clearly outline what we expect from tenants. 

These addendums state that tenants are responsible for minor maintenance like changing light bulbs and batteries in smoke detectors. They also clarify the difference between “normal wear and tear”—which is to be expected from any rental and should be covered by the owner—and damage from negligent use or wrongful intent, which the tenant would be charged for.

But most importantly, these addendums state that tenants are required to notify us immediately of any maintenance issues in their home. That way, we can know about issues as soon as they occur.

Even then, we don’t live in a perfect world and we can’t reasonably expect that every single tenant will inform us of maintenance issues. That’s why we also have yearly checks where we inspect our properties for maintenance issues or damage, regardless of what we have or have not heard from the tenant. 

A quiet tenant is not necessarily a good tenant, and we want to make sure that our properties are in good shape even when a seemingly great tenant has been staying in them year after year.

Why We Take Maintenance Requests So Seriously

It might seem like we’re going a bit overboard with this process, but there’s a reason why we take this stuff so seriously.

Deferred maintenance is a common problem within property management that can needlessly cut into owner profits. Deferred maintenance is basically the idea that the longer you put off a repair, the more expensive it will get. If you fix a leak right away, it will be fairly inexpensive. But if you let a leak linger for days, weeks, or months, it could cause serious damage to the property that will result in large costs for the owner.

We try to minimize the effects of this by requiring tenants to report maintenance issues immediately and using our tenant portal system to automatically create alerts for problems that are fixed multiple times. For example, if a stove has been fixed three times in one year, we’ll be alerted and will likely replace the stove to stop spending money on repairs year after year. Even though it might be costly to buy a new stove, it’s even more costly to send out repairmen multiple times.

Not only does this prevent the costs associated with deferred maintenance, it keeps tenants happy because their problems are fixed right the first time. We don’t want to be sending vendors out to fix problems multiple times, and neither do the tenants!

Need Help?

Maintenance requests are our bread and butter, and they’re one of the most common reasons why landlords elect to work with us. If you’re getting tired of dealing with maintenance issues in your properties or even if you’re looking for some advice on the best way to handle maintenance as a landlord, we’re here to help.