Business
How to Hire a Property Manager
Property management companies are no longer just a luxury in the modern real estate industry; they’re a necessity for many property owners. Imagine freeing yourself from the daily grind of tenant complaints, maintenance issues, and rent collection. Sounds like a dream, right?
A good property management company can turn that dream into reality. However, the keyword, in this case, is “right.” Choosing the right property management company can be the linchpin in the success of your rental business, affecting everything from your peace of mind to your bottom line.
Should I Hire a Property Manager?
For property owners, hiring a professional property management company often comes down to a few key factors, ranging from the desire for more free time to the need for specialized expertise in managing rental properties.
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Before you embark on the journey to hire a property manager, consider the following:
Ease in Tenant Interactions: A skilled property manager can field all tenant communications, from complaints to maintenance requests. This takes the burden off your shoulders and allows you to focus on other aspects of your business.Maintenance Management: The property manager schedules regular upkeep and emergency repairs. This ensures that your property remains in top condition, attracting and retaining quality tenants.Legal Matters: A property manager knows the ins and outs of local real estate laws. They can guide you through legal processes, such as evictions, thereby reducing your risk of legal complications.Steady Rental Income: Timely rent collection is a priority for any property manager. This ensures a consistent and reliable income stream for you, the property owner.Efficiency: With proven methods and systems, a professional property manager runs operations smoothly. Such efficiency can save you both time and money in the long run.
Key Responsibilities of a Property Manager
When you hire a property manager, you’re essentially hiring a multi-talented individual or team to handle a wide array of tasks, each crucial for the successful operation of your rental properties.
What are a property manager’s responsibilities? While the property manager job description could be much longer, the following are some key roles:
courtesy of smallbiztrends.comTenant Screening Process: A property manager conducts comprehensive background checks. This ensures that you’re leasing to reliable and qualified tenants, reducing the likelihood of issues down the line.Coordinating Property Inspections: Regular inspections are not just scheduled but also meticulously planned. This proactive approach helps in identifying and addressing issues before they escalate.Rent Collection: A property manager not only ensures timely rent collection but also deals with any delays or complications. This keeps the income flowing and reduces stress for the property owner.Liaising with Service Providers: Property managers have a network of trusted service providers. They handle all communications and negotiations, ensuring quality work at reasonable prices.Marketing and Advertising: Effective marketing is a skill that good property managers possess. They use various job platforms and best rental listing sites to advertise your property, aiming to minimize vacancies and maximize your income.
How Much Does It Cost to Hire a Property Manager?
Understanding the cost of hiring a property manager is crucial for making an informed decision. Different companies offer varying property management fee structures, and awareness of them can help you budget effectively.
Some common property management costs include:
Percentage-Based Fees: Many property managers charge a percentage of the monthly rent. Fees can range from 8% to 12% and are often deducted directly from the collected rent. This structure aligns the manager’s incentives with your own, as higher rent usually means higher fees for them.Flat Fees: A constant monthly fee is another option some property managers offer. The fee remains the same regardless of the rent amount, providing a predictable expense for property owners.Tenant Placement Fees: One-time fees for finding and placing a new tenant are common. Usually equal to one month’s rent, this fee covers the cost of advertising, screening, and lease preparation.Maintenance Mark-Ups: Some property managers add a markup to maintenance costs. An additional charge covers the time and effort spent coordinating repairs and maintenance.
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Essential Qualities of a Property Manager
Looking for specific skills and traits ensures effective management of your property. These qualities can make or break your experience as a property owner.
When selecting the ideal manager for your property, make sure to consider the following essential qualities:
Expertise in Local Real Estate Markets: Property managers with local market knowledge can set competitive rent prices. Such expertise also aids in effective property marketing.Strong Interpersonal Skills: Good communication is key in property management. Managers with strong interpersonal skills can handle tenant interactions and negotiations with ease.Knowledge of Tenant Laws: Legal compliance is crucial. Well-informed property managers can help you navigate complex legal situations, reducing your risk of legal issues.Efficiency in Handling Maintenance Requests: Prompt and effective handling of maintenance issues keeps tenants happy. Competent property managers have systems in place to address these requests quickly.Financial Acumen: Budgeting and financial planning are skills good property managers should possess. Such skills ensure that your property remains profitable while avoiding unnecessary expenses.
Benefits of Engaging a Property Management Company
Choosing between a property management company and an individual manager is another crucial decision.
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Companies often offer distinct advantages. If you choose to contract a property management company, you might enjoy the following benefits:
Dedicated Team: Property management companies usually have a team of professionals. A team approach ensures someone is always available to address issues, providing a higher level of service.Streamlined Processes: Established procedures for everything from rent collection to maintenance make operations more efficient. Such streamlined processes reduce stress for property owners.Broader Resources: Companies generally have more resources. Advanced software for property management, bulk discounts from service providers, and a larger staff are some examples.Legal Compliance: Reputable companies stay updated on all legal requirements. Expertise in legal matters can help you avoid costly mistakes and legal complications.Marketing Capabilities: A dedicated marketing team is often a feature of larger companies. Such a team uses unusual ways to promote a job opening and strategies to advertise your property, aiming to minimize vacancies and maximize income.
Key Steps to Hiring a Property Manager
Embarking on the search for a property manager requires a well-thought-out plan. Fortunately, we’ve compiled a list of actionable steps to guide you through the process, ensuring you make an informed decision that aligns with your property management needs.
Steps to Hire a Property ManagerWhat It EntailsWhy It’s ImportantTip for SuccessAssessing Your Rental Property NeedsDetermine the level of service you need, whether full-service or specific tasks like tenant placement.Helps you identify the services you actually need, saving you money and time.Make a list of your biggest pain points in property management to identify your needs.How to Find Property ManagersUse multiple methods like referrals, online directories, and contacting local companies.Increases the chances of finding a reliable and experienced property manager.Always cross-reference your findings from different sources for a well-rounded view.The Importance of ReferralsSeek recommendations from trusted sources and read online reviews.Provides insights into the reliability and effectiveness of potential property managers.Don’t solely rely on reviews; personal recommendations often offer more reliable information.Interviewing Potential Property ManagersPrepare a list of essential questions to ask and be vigilant for red flags.Ensures you hire a competent and trustworthy property manager.Always check references to verify the information provided during the interview.Reviewing the AgreementCarefully read the contract to understand fees, services, and termination clauses.Prevents misunderstandings and legal complications down the line.Consult a legal advisor if you’re unsure about any terms in the agreement.
ssessing Your Rental Property Needs
Before you start your search, it’s crucial to assess the level of assistance you require. Some property owners may need full-service property management, which includes everything from tenant placement to maintenance. Others might only require help with specific tasks, such as tenant screening or rent collection.
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How to Find Property Managers
Finding the right property manager involves more than a quick Google search. A multi-pronged approach often yields the best results. Consider asking for referrals from other property owners, searching online directories, or even reaching out to local rental property management companies. Besides recommendations, leverage job platforms and property websites to find potential managers.
The Importance of Referrals When Hiring a Property Manager
Word of mouth remains a powerful tool in the property management industry. Seeking referrals from trusted sources can provide invaluable insights into a property manager’s reliability and effectiveness. Reading online reviews and conducting thorough research into potential companies can also offer a more complete picture.
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Interviewing Potential Property Managers
The interview process is a critical step in hiring a property manager. Prepare a list of essential questions to ask, covering topics from their experience to their fee structure. Be vigilant for any red flags, such as vague answers or a lack of references, which could indicate a less-than-ideal candidate. And be ready with an interview rejection letter for candidates who don’t meet your requirements.
Reviewing the Agreement
Before signing on the dotted line, scrutinize the property management agreement carefully. A clear and comprehensive contract should outline fees, services provided, termination clauses, and other essential terms. Understanding these details can prevent misunderstandings and potential legal issues down the line.
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How to Onboard New Employees: If you hire a manager or a team, having an efficient training plan template helps ensure they align with your property’s needs and understand their responsibilities.
Reduce Hiring Bias: Ensure your hiring process is free from biases. Avoiding favoritism, especially contemplating questions like,” Should I hire a family member?” helps maintain professionalism.
FAQs: How to Hire a Property Manager
What Services Do Most Property Managers Offer for a Rental Property?
Most property managers offer a comprehensive range of services that include tenant screening, rent collection, property maintenance, and advertising on the best rental listing sites. They also handle lease agreements, evictions, and legal compliance. Some even provide financial reporting and marketing services to help fill vacancies. The goal is to manage all aspects of a rental property, freeing up the owner’s time and ensuring a steady income stream.
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How Do Property Managers Handle Maintenance Requests?
Property managers typically have a system in place to handle maintenance requests efficiently. Tenants can usually submit requests through an online portal or directly to the manager. The manager then assesses the issue and either approves immediate repairs or schedules them as needed. They often have a network of trusted contractors to perform the work, ensuring quality and timely service.
Can I Hire a Property Manager for Just Tenant Placement?
Yes, some property managers offer tenant placement as a standalone service. This service includes advertising the property, conducting showings, screening applicants, and preparing the lease agreement. Once a tenant moves in, management responsibilities revert back to the property owner. This option is ideal for owners who want to manage their properties but need help with the initial tenant placement.
How Does a Property Management Company Handle Disputes with Tenants?
Property management companies usually have protocols for resolving tenant disputes. They first try to mediate between the tenant and the property owner to reach an amicable solution. If that fails, they may resort to legal measures such as issuing formal notices or initiating eviction proceedings. Their expertise in tenant laws ensures that all actions comply with local regulations, reducing the owner’s legal risk.
How to Find the Best Property Management Company in My Area?
Finding the best property management company involves research and due diligence. Start by asking for referrals from other property owners or real estate professionals. Online directories and reviews can also provide valuable insights. Once you have a shortlist, interview each company to assess their services, fees, and experience. Always check references and read the management agreement carefully before making a decision.
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When the phrase “annual shareholder meeting” is mentioned, what picture does it conjure in your mind? Is it a grand gathering of influential figures at the forefront of industry giants like Amazon, Exxon or Apple?
Or perhaps your mind veers towards a more local scenario, picturing someone like Jim, who operates a small landscaping business from his residential premises?
Several owners of small businesses choose to become incorporated, often by establishing either a C Corporation or S Corporation).
They do this primarily to safeguard their personal assets from potential business-related liabilities. Additionally, the currently reduced corporate tax rate makes the C Corporation an appealing choice for businesses of various sizes.
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Whenever a C or S corporation is formed, it’s crucial to comply with the corporate administrative requirements of your state, even if your corporation consists of just one person. These stipulations necessitate the hosting and documentation of both board and shareholder meetings.
Single Owner Corporations
This piece will provide insights into single owner corporations. A phenomenon that’s becoming increasingly commonplace, single owner corporations bring with them a unique set of challenges and advantages.
In particular, we’ll respond to some of the most typical questions asked about a single owner corporation and the administrative requirements that come with running one.
1. Can I Have a Single Shareholder Corporation?
Indeed, it is possible to have a single shareholder corporation. In fact, every state across the U.S. permits a single individual to both form and govern a corporation.
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They also allow for the corporation to have just one director, opening up the possibility for you to take up the roles of the sole shareholder, director, and officer of your company.
This means you can effectively oversee and steer your corporation single-handedly.
2. What are the Administrative Meeting Requirements for a Single Shareholder Corporation?
All corporations, regardless of size or number of shareholders, are legally required to hold at least an annual shareholder meeting and a board of directors meeting.
While it’s feasible and at times necessary to hold additional meetings, the minimum is firmly set at one per year.
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This requirement holds true even for single shareholder corporations. It’s an essential part of maintaining good corporate governance and fulfilling statutory obligations.
3. What should I Discuss in the Annual Shareholder Meeting?
The annual shareholder meeting is primarily dedicated to electing the corporation’s board of directors for the upcoming year.
In larger corporations, this process can become a competitive and heated affair, with various candidates vying for a spot on the board. For single shareholder corporations, however, the process is considerably simpler.
In essence, you can unilaterally decide to appoint yourself as the director. Following this, you must create meeting minutes that demonstrate that you, the sole shareholder, have elected yourself as the lone director of the board.
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4. What Should I Discuss in a Board Meeting?
A corporation’s board of directors is typically tasked with making impactful financial decisions, ones that substantially affect both the corporation and its shareholders.
This responsibility spans a range of decisions such as issuing stock, approving loans or acquisitions, appointing officers, setting officers’ remuneration, approving raises, and announcing dividends.
In the context of single owner corporations, the most recurrent topic you’ll likely “discuss” and record pertains to notable changes in your compensation and any distributions of dividends.
5. How do I Document a Meeting?
For both the board of directors meeting and the annual shareholder meeting, it’s essential to create what are known as meeting minutes.
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While these minutes don’t have to detail every single discussion or event that occurred, they must accurately document the main points and any decisions that were reached. Typically, these meeting minutes consist of:
The date, time and location of the meetingWho attended. Note: for a board of directors meeting where you’re the only one attending, you’ll need to document that you hold all three officer positions (CEO, CFO/treasurer and secretary) and are in attendance.Agenda items with a brief description of each itemVoting actions – in the case of a single shareholder corporation and single director, you’ll just be documenting how you votedTime when the meeting was adjourned
You aren’t obliged to create meeting minutes from scratch. Several free templates are readily available online to act as a framework.
Utilizing a template not only makes the task less daunting but can also ensure you meet your administrative responsibilities promptly.
Importantly, there is no requirement to file your minutes with the state or any other body. They should, however, be stored safely with your other significant corporate records, such as articles of incorporation, bylaws, and resolutions.
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6. Do I Really Need to Bother with This?
When operating as a single shareholder and director, it can be tempting to sidestep corporate formalities. This might seem inconsequential in the short term, but neglecting these requirements could potentially jeopardize your liability protection.
Maintaining your corporation’s status as a separate legal entity requires adherence to certain corporate formalities, like holding an annual shareholder meeting or filing your annual report.
If you face a lawsuit, the opposing party may argue that your corporation hasn’t fulfilled its corporate obligations and is merely an extension of your personal affairs.
If they manage to make a persuasive case, they might be able to get a judgment against your personal assets in addition to your company’s resources.
The takeaway message is clear: you must hold an annual shareholder meeting and an annual board of directors meeting, irrespective of the size of your corporation.
As a sole shareholder/owner, your meetings and decisions are likely to be straightforward.
It’s crucial to take a little time to conduct your meeting and record it properly. By doing so, you’ll be safeguarding your corporation’s good standing and preserving your limited liability status.
Single Owner vs Multiple Shareholder Corporations: Key Considerations
In addition to the specific points already discussed, it’s important to understand the broader distinctions and implications of operating as a Single Owner Corporation versus a Multiple Shareholder Corporation. These differences can significantly impact managing, structuring, and growing your business. Here’s a closer look at some key aspects:
Decision Making and Control:
In a Single Owner Corporation, decision-making is streamlined and quick, as only one person is making all the crucial decisions. This can be highly efficient but also places all responsibility on the single owner.Multiple Shareholder Corporations involve more stakeholders, necessitating a more complex decision-making process. While this can lead to more diverse perspectives and potentially better decisions, achieving consensus also requires more time and effort.
Raising Capital and Expansion:
Single Owner Corporations may face challenges in raising capital as they rely on the resources of one individual. Expansion might be limited by the owner’s finances and capacity to secure loans.Multiple Shareholder Corporations can raise capital more quickly through the sale of stock and may have access to a wider range of resources, making expansion and growth more feasible.
Legal and Tax Considerations:
Single Owner Corporations often have simpler legal and tax reporting requirements, but they also miss out on some of the benefits that come with having multiple shareholders, such as the ability to distribute profits among several individuals to potentially lower tax liabilities.Multiple Shareholder Corporations face more complex legal and tax landscapes but can leverage these complexities for financial benefits, such as through tax strategies that are unavailable to single owners.
Succession Planning:
For Single Owner Corporations, succession planning is critical, as the entire business hinges on one individual. Planning for the future and potential incapacity or retirement of the owner is crucial for continuity.In Multiple Shareholder Corporations, the impact of losing one shareholder is usually less significant. Succession planning involves multiple parties and can offer more stability and options for the business’s future.
Understanding these differences is essential for any entrepreneur or business owner as they plan their corporation’s structure and strategy. Whether operating as a single owner or with multiple shareholders, each has its unique advantages and challenges that must be carefully navigated for long-term success.
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The Miami Small Business Expo 2024 is a premier business-to-business trade show and educational event designed exclusively for entrepreneurs, startups, and small business owners. It will take place on March 14, 2024, from 10:00 AM to 5:00 PM EST at the Miami Airport Convention Center.
Key Features of the Miami Small Business Expo 2024
Exhibitors: Over 300 exhibitors will showcase their products and services, providing you with the opportunity to network with potential partners and suppliers.Seminars and workshops: Learn from industry experts and gain valuable insights on a variety of topics, such as marketing, finance, business growth, and more.Networking opportunities: Connect with fellow business owners and entrepreneurs to build relationships and share ideas.Speed networking: Get face-to-face with dozens of potential customers and business partners in a short amount of time.Live panel debates: Hear from business leaders and experts as they discuss the latest trends and challenges in the small business world.
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You can see a full list of events, contest and award listings or post your own events by visiting the Small Business Events Calendar.
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Small business grants can provide hugely valuable resources to small businesses. However, the extra influx of cash can only have a major impact if entrepreneurs use funds wisely. Luckily, many small business grant programs also provide educational resources like courses and mentorship to help entrepreneurs through this part of their journey. Learn more about some recent programs offering grant funding and educational resources to small businesses.
Verizon Digital Ready Grants
The Verizon Small Business Digital Ready Program offers $10,000 grants to small businesses. Recently, Houston area entrepreneur Diedre Mathis received a surprise $10,000 grant from the program to support her business, the Wanderstay Houston Hostel. She is one of many entrepreneurs that has benefitted from the Verizon Small Business Digital Ready Program in recent years. In addition to grant funding, the program offers free courses, mentorship, and networking opportunities. Small businesses have until December 20, 2023, to apply for the current grant cycle. To qualify for a chance to win a $10,000 grant, participants need to complete two modules in any combination – courses, coaching sessions, or community events. This step makes them eligible for grant consideration.
Women Business Center of Fayetteville Verizon Digital Ready Partnership
The Women Business Center of Fayetteville (WBCFAY) Program, operated by the Center for Empowerment and Economic Development (CEED), is teaming up with Verizon’s Small Business Digital Ready program to offer a unique chance for small businesses. This collaboration brings $10,000 grants and an online learning platform to small business owners. Key features of this program are:
courtesy of smallbiztrends.comOpen and Free Registration: Any small business is welcome to sign up without any cost or need to engage with Verizon services.On-Demand Learning: The program provides materials that users can access whenever they want, allowing them to learn at a pace that suits them best.Tailored Experience: Business owners have the flexibility to customize the program according to their specific requirements, making it easier to adapt to changing interests and challenges.
State College Small Business Grant Program
The Downtown State College Improvement District in State College, Pennsylvania recently unveiled a fresh grant initiative, designed to assist small business owners and property managers with various capital enhancements. Set to begin in early 2024, this initiative focuses on facade and internal refurbishments, playing a key role in the rejuvenation of the downtown area. Through the Small Business Grant Program, eligible downtown participants will have access to grants between $1,000 and $5,000. Recipients of these grants will need to provide a matching amount as well.
Southeast Queens Entrepreneur Grant Program
Southeast Queens small businesses currently have the chance to secure a grant from the Greater Jamaica Development Corporation. This $2,500 grant is part of the Southeast Queens Entrepreneur Grant Program, designed to support BIPOC-owned businesses. Eligible businesses can access up to $2,500 in grant funding to assist with operational expenses. To qualify, businesses should be operational for at least one year, for-profit, have no more than ten employees, and report annual gross receipts ranging from $50,000 to $500,000. The grant is available to businesses in various neighborhoods, including Bellaire, Brookville, Cambria Heights, Hollis, Hollis Hills, Holliswood, Jamaica, Jamaica Estates, Jamaica Hills, South Jamaica, Rochdale Village (Cooperative Housing Development), St. Albans, Laurelton, Queens Village, Rosedale, Meadowmere, and Warnerville.
urora Small Business Equity Fund
Business owners in Aurora, Colorado who are interested in enhancing their eco-friendly practices have an opportunity to apply for a new small business grant program to help. The Small Business Equity Fund, initiated by the Colorado Green Business Network in 2022, is being offered by the Colorado Department of Public Health and Environment. This initiative aims to assist small businesses in Aurora and Commerce City with energy-efficient upgrades. The fund provides a range of upgrades, such as LED lighting installation and up to 70 percent cost coverage for replacing refrigeration equipment, with a maximum of $10,000 per business. The evaluation of applications by officials is slated to commence in January.
Oneonta Community Development Block Grant
Oneonta, New York is seeking $200,000 from a state fund to provide microenterprise grants for small businesses. This effort would mark the city’s eighth receipt of a Community Development Block Grant, which is overseen by the New York State Division of Homes and Community Renewal. Of this funding, $178,000 is expected to be allocated for business grants by the spring, while the remaining $22,000 would cover the administrative expenses of the city staff. Businesses with up to five employees, including the owner, can apply for these grants, which are expected to range from $5,000 to $35,000. Grants may also require a 10 percent additional contribution from the business owners. To be eligible, the business owner must have a low to moderate income, or the business should create a job that supports a low to moderate income individual. The grant can be used for various expenses, including purchasing machinery, equipment, furniture, inventory, and providing operating capital.
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What Solo Owners of Corporations Need to Know About Annual Meetings
Don’t Miss Small Business Expo in Miami
Verizon Digital Ready Program Offers $10,000 Grants to Small Businesses
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