The Comprehensive Guide to Property Management Services

The Comprehensive Guide to Property Management Services

Last Updated: January 17, 2023 by Cameron Smith

When you hire a property management company, you need to know exactly what it does and what services it offers so you understand what to expect and what work you need to take care of yourself. Companies typically offer a wide range of property management services, though they can vary.

In this guide, we’ll go over what property management services do and what they entail, including:

Property Marketing

Most property managers don’t just maintain properties as they are. They also handle property marketing services, ranging from creating ads and running marketing campaigns to receiving phone calls from prospective tenants to providing additional information. Property marketing services are crucial as they’re needed to bring tenants to your open units so you can start earning income.

Property marketing services include:

  • Creating ads and other marketing materials, as well as publishing those materials in some cases
  • Preparing open units for tenant tours
  • Listing units on sites like the MLS
  • Showcasing units to prospective tenants

Create Ads and Marketing Materials

Property management companies create the advertisements, posters, and other marketing materials needed to effectively market vacant units. This is an important part of property management in general. Without marketing, it will be difficult to get people into your vacant rental units, especially soon after their previous occupants leave.

Depending on the experience and specialty of a property management company, they may create different types of marketing materials including:

  • Online advertisements/PPC or pay-per-click ads
  • Social media posts
  • Online flyers and banners
  • Listing advertisements, which can appear in physical or online newspapers
  • Physical posters
  • Brochures

The best property management companies will perform this service efficiently and effectively. Some property managers have a lot of experience making compelling, eye-catching ads that are more likely to draw a lot of attention to your vacant units.

While many property managers create advertisements themselves, others outsource this work to marketing firms or agencies. In the latter case, they’ll provide the details of vacant units to marketing companies, then receive completed ads ready to go.

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Prepare Units for Tours

Property management companies are normally responsible for preparing vacant units or tours for inspections by prospective tenants. While some property owners do this work personally, others outsource the work to their management companies, as it can include a lot of time and effort.

Preparing units for tours means:

  • Cleaning units thoroughly so they make a good first impression on prospective tenants.
  • Redoing or upgrading elements of the units that are outdated – for example, your property manager may replace a vacant unit’s old carpet with new hardwood floors.
  • Staging units by placing “filler” furniture. Note that some property management companies hire professional stagers or staging companies to do this work instead.
  • Ensuring that the units are priced appropriately, which is common if rent prices have gone up in the nearby area. In some cases, this means hiring an appraiser.

After this work is complete, property managers take well-lit, demonstrative photographs of the vacant units that stand the best chance of drawing tenants. Again, because it’s important to have high-quality photographs representing your vacant properties, your manager may hire a professional photographer or photographing agency to do this work instead of doing it personally.

Once the photos are captured, they can be added to unit listings, placed on your property management company’s website, etc.

List Units

Property management companies are usually responsible for listing units on a variety of databases and websites. Management companies must list available units so that Realtors and other agents know that your properties are vacant and ready for new tenants.

For instance, your property management company may list vacant units on your area’s MLS or multiple listing service. This private database is the most important resource used by realtors or real estate agents, and it’s what they check when they look for vacant units for their clients.

However, this isn’t the only place where a property management company may list a unit available for rent. They may also list units on paid and free rental listing websites. Or they may announce rental vacancies on print publications, signs, flyers, and posters, all of which are marketing materials the company may create itself.

In any case, your property management company is responsible for listing your units promptly and effectively. The sooner your vacant units are listed, the faster they can potentially be filled by another rent-paying tenant.

Showcase Units

In addition to the above services, property managers physically show vacant units to prospective tenants. In many locations and above certain price points, potential rental tenants want to see units in person before they sign paperwork. Photos can only tell so much about a potential property, and seeing a unit in person gives possible tenants the opportunity to know what the space feels like.

To showcase a unit, a property manager or one of their workers will meet with prospective tenants at the unit, unlock the place, and show them around. They may point out notable features or inclusions in the vacant unit that may make it more attractive to the potential tenants, as well as downplay possible negatives.

During this showcasing appointment, they may speak with the realtor or agent the tenants are working with. Depending on your area, your property manager may showcase units that are still occupied if there is little overlap between tenants.

For example, if your leases all end on August 31 and your leases begin on September 1, your previous tenant will still likely be living in the unit while new tenants are checking it out. Therefore, your property management company may need to coordinate with current tenants and make sure that showing the unit is acceptable or schedule times to showcase the unit when the current tenant is not present.

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Property Maintenance

Property maintenance services form the bulk of crucial work that property management companies perform. They revolve around maintaining your property so it looks good and is comfortable for current tenants, as well as adheres to local or federal regulations. Property maintenance tasks include but are not limited to:

  • Cleaning garbage from around the property
  • Performing outdoor area maintenance
  • Maintaining property amenities like swimming pools, gymnasiums, etc.
  • Taking and fulfilling any tenant repair or maintenance requests
  • Making crucial repairs to the property when necessary
  • Performing unit inspections or contracting inspectors on a regular basis
  • Sending regular reports to property owners
  • Making important payments on behalf of the owner
  • Representing property owners in meetings
  • Staying informed about changes to local or federal regulations

Pick Up Trash

A big part of proper property management is cleaning up garbage which can accumulate throughout a property, especially larger properties like apartment complexes. Your property manager will clean up trash and make sure that the grounds look good all year round.

Furthermore, most property management companies install trash cans and waste disposal sites throughout the properties they oversee. This makes trash collection easier and inspires tenants to deposit their trash in appropriate receptacles.

If your units allow pets, your property management company may further be responsible for cleaning up pet waste if it is not picked up by tenants. Your property manager may have the right and responsibility to impose fines or penalties on tenants who do not pick up pet waste, as well as recommend further proceedings like eviction for tenants who refuse to abide by the rules.

Picking up trash is a constant duty for most large properties, such as apartment complexes or several single-family homes on the same block. Therefore, your property manager may employ one or more employees to take care of this work in addition to groundskeeping work (see more below) as their primary duties.

Perform Yardwork and Outdoor Area Maintenance

If your property has significant grounds or outdoor areas, your property management company typically takes care of yardwork, groundskeeping, and outdoor area maintenance. This can be relatively simple or very involved depending on what you want for your rental properties.

For example, if you have a basic apartment complex with a few lawns and some bushes, your property manager may perform duties including but not limited to:

  • Mowing the lawn
  • Trimming the bushes
  • Hiring an arborist to take care of trees on the property from time to time

However, if your apartment complex has decorative hedges, flowerbeds, and other aesthetically pleasing grounds, your property manager may also be responsible for taking care of those areas. If they lack the manpower or knowledge to do so properly, they could contract the work to local groundskeeping agencies in the area.

In any case, your property management company is responsible for ensuring your grounds and outdoor areas are navigable and safe for tenants all year round. That means your property management company also takes care of duties like:

  • Shoveling snow after a storm
  • Calling the city to repair potholes or other hazards to drivers/tenants
  • Hiring contractors to repaint parking lot lines/signs
  • Removing leaves, fallen branches and trees, and other debris
  • Performing landscaping work

Your property management company may do all this work personally or hire contractors to tackle most of it, depending on how many people work for the company, its area of expertise, etc.

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Maintain Property Amenities

Your property manager is responsible for maintaining amenities such as swimming pools, vending machines, laundry areas, and more.

Many of the best rental properties have amenities that draw tenants to their units and that allow property owners to charge higher prices, but these have to be kept in working condition and looking good.

For instance, if you have one or more pools in your apartment complex, your property manager will be responsible for:

  • Cleaning leaves and debris out of the pool while it is in use
  • Setting and enforcing rules for the use of the pools
  • Regularly cleaning the pools and maintaining pool chemical balance
  • Placing protective covers over or draining the pools in the winter when they are not in use

Similarly, amenities like laundry machines must be overseen, repaired, and have money taken out of them every few days. Your property management company can do this, or you can handle it personally, depending on the level of labor you expect to be associated with the work.

Generally, it’s better to have your property manager maintain property amenities if they are numerous and scattered across your properties. But if you only have one amenity, like a laundromat in the basement beneath an apartment building, you could save some money by tackling this job yourself (and pocket the money from the laundry machines in the process).

Take and Fulfill Tenant Repair/Maintenance Requests

Another key property management service is taking and fulfilling any tenant repair or maintenance requests. No matter how well you stock your vacant units with appliances and other features, things will break from time to time. Your property manager can handle these repair requests quickly, even on the weekend.

To facilitate fast repair or maintenance request response times, your property management company may have a hotline or online messaging system on its website. This will allow tenants to file requests for repairs or maintenance quickly, as well as categorize their requests.

For instance, a tenant can request maintenance on a noncritical issue or a critical issue; in the latter case, the property manager may inspect the issue personally or call someone, like a contractor, to offer assistance.

Other management companies have phone lines that connect tenants to repairmen or contractors directly.

Note that property management companies can have varying repair policies and schedules. Most property managers maintain an in-house team of repairmen or contractors who can handle the majority of daily repairs, like broken dishwashers. More complex or emergency repairs, or repairs that occur over the holidays, may need to be handled by specialists.

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Make Important Repairs to the Property

If your properties have damage, either through accidents or through general wear and tear, your property management company is responsible for repairing those issues. Your management company should notice things in need of repair shortly after problems crop up if they patrol your property regularly. However, you can also point out things that need to be repaired.

For example, if a tree falls and damages a fence along the border of your property, your manager should notice the damage and immediately take steps to repair the issue. They may call a contractor to disassemble and remove the tree, then call another company to repair the fence or may fix the fence themselves.

Note that both tenant repair requests and property repairs should come out of the repair reserve fund you keep for this purpose.

Perform or Contract Unit Inspections

Your rental units must be regularly inspected by licensed professionals, so your management company is responsible for contracting or performing those inspections every few months or every year.

Depending on your policy or the policy of your property manager, inspections can occur every season or annually. Inspections check for things like mold growth, pests, and other issues that need to be resolved before new tenants move in or leases are renewed.

Most inspections don’t take very long and don’t cost very much; you only have to pay for them once in a while. However, they’re an important part of responsible property ownership. Some inspections are also legally mandated by your local municipality or state.

Send Property Owner Regular Reports

Another key property management service is sending owners like you regular reports. As a property owner, you’ll want to know how your properties are doing, whether there have been any major issues, and how the repair reserve fund is faring from time to time, especially if you’ve been away for a while or have just come back from vacation.

In any case, property managers should update you about the status and finances of your rental properties at least once per month, if not more frequently. You can work out the frequency of reports with your management company after hiring it.

The most professional property managers have well-laid-out, thoughtfully organized reports that are easy to skim. If need be, you may provide your property manager with a report template that you want them to fill out every so often, such as once per month. This allows you to keep detailed records of your own.

Make Payments on Behalf of the Owner

Property managers typically make certain payments on behalf of their clients, such as mortgage payments, homeowner’s insurance or other insurance payments, HOA dues, and so on. This is for practical reasons.

As the entity that interacts with your property most frequently, your property manager is in a better position to collect rent money from tenants and make payments to appropriate organizations, such as the local homeowner’s association. Therefore, your property manager may offer to make certain payments on your behalf if you authorize them to do so.

If you let them perform this service, be sure to determine:

  • Whether these services are included in your monthly property management fee or are classified as “extra” duties or services
  • How the property manager pays for the fees. For example, do they take the money out of the collected rent and forward you the rest? Do you maintain a reserve to pay these regular fees? Or do you have another arrangement with your property management company?

Regardless, it’s usually easier to have your property manager pay certain fees, especially if you have many properties scattered across an area, than to do so yourself and keep track of all the various bills.

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Represent Property Owner in Meetings

Some property management companies represent their clients in local meetings, like homeowner’s association meetings. This is not a standard service, however, so expect to pay a little extra if you want your property manager to do this.

If your rental properties are part of HOAs, you’ll need to occasionally attend meetings to hear community concerns, vote on policies, etc. If you don’t want to attend these meetings personally, you can sometimes have your property manager do so on your behalf, take detailed notes, and even vote with your authority if they have your written permission to do so.

But not all property management companies offer this service. If it’s important to you, be sure to ask about it during your contract negotiations so you know what to expect and so you don’t expect it if the company doesn’t offer it.

Keep Abreast of Local and Federal Regulations

Your property management company should stay well-informed and up-to-date regarding local and federal regulations that may affect your rental properties. If there are any changes, it’s their responsibility to inform you, especially if it will require a decision or change on your part.

This rare service technically isn’t “labor,” so you shouldn’t expect to be charged for it (even though it may not be listed in the typical duties for your property management company). As a property owner, it’s a good idea for you to try to stay up-to-date with local or federal regulatory changes as well!

Property Upgrades/Renovations

From time to time, you may wish to upgrade or renovate your property to make it more attractive to new tenants. Property management companies oftentimes handle property upgrade and renovation services, which can include:

  • Pitching possible lucrative upgrades to property owners
  • Carrying out property upgrade requests by contacting contractors, taking care of the work personally, etc.
  • Spending funds to carry out upgrades within assigned responsibilities

Pitch Potential Upgrades to the Owner

Many experienced property managers know what can make rental properties more attractive to tenants, so they may recommend potential upgrades to their clients.

If your property manager pitches an upgrade or renovation that they believe will result in higher rental income or other improvements, consider it carefully. If the property manager has a lot of experience and a great reputation, it may be worthwhile looking at the books to see if you can make the renovation or upgrade as recommended.

However, not every property manager volunteers this information, nor will every property management company have the experience required to recommend good improvements. Don’t expect this service, even though it can occur (particularly if you have a good relationship with a long-term management partner).

Carry Out Upgrade Requests

If you have an upgrade idea or renovation suggestion, your property management company is responsible for carrying out that request/order. For instance, if you want to install a pool in your apartment complex to draw new tenants to the area, your management company will be responsible for:

  • Figuring out how the pool will work
  • Drawing up a list, contacting, and hearing bids from different contracting companies
  • Scheduling and overseeing the work as it occurs
  • Making sure the work is completed on time and within your set budget

Your property management company won’t pay for upgrades out-of-pocket, of course. It’s up to you to provide the funds necessary for any renovations or improvements to your properties. However, once you decide something is needed, an experienced and well-staffed management company can handle the bulk of the work for you. When it’s finished, you can tour the improvement and recommend changes or order adjustments as needed.

Depending on the complexity or difficulty of the upgrade you have in mind, your management company may handle it personally. For example, if it has a skilled carpenter on its staff, your management company may perform a carpentry-related renovation itself.

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Tenant Services

Property management companies usually handle tenant services. Tenant services revolve around collecting rent and regularly interacting with tenants, as well as finding and inviting tenants to live in open units. Tenant services include:

  • Collecting new tenant applications
  • Screening potential tenants and performing background checks
  • Interviewing tenants
  • Calling tenants back
  • Writing and giving out leasing agreements
  • Performing move-in inspections with new tenants
  • Sending out rent notices and other important information to tenants
  • Evicting problematic tenants
  • Inspecting units when tenants move out
  • Collecting old tenant keys and re-keying locks
  • Forwarding unused security deposit funds to old tenants

Collect Applications

All property management companies are responsible for collecting applications from prospective tenants. Application collection also involves reading through the applications, filtering out immediate tenants who won’t be offered units, and organizing the applications for further review/storing them for records.

Collecting applications can be easy or relatively time-consuming, depending on how your management company likes to do it. Many management companies have prospective tenants submit online or electronic applications, which can then be reviewed using a centralized platform or software app.

Physical applications, on the other hand, must also be collected physically or mailed to a property management company’s business office.

Screen Tenants

After collecting applications, property management companies screen tenants by analyzing those applications. This is just the first step of the tenant acceptance process.

Tenant screening is a detailed and comprehensive sequence for most management companies. It involves:

  • Reading through tenant applications carefully
  • Making sure a tenant meets the basic requirements for unit residency
  • Performing a thorough background check on prospective tenants

Background checks usually involve contracting a third-party company that investigates the records and personal histories of potential tenants. Depending on the service your management company uses, background checks can take anywhere from a few days to a few weeks to complete. Generally, the faster this is, the better; it allows management companies to get back to prospective tenants more rapidly.

During the screening process, your management company will try to select the best-suited tenants for available units based on things like income, past rental history, etc. In some cases, they may call a tenant’s previous landlord or property manager to inquire about their behavior or to clear up concerns regarding past evictions, past late payments, etc.

There’s no such thing as a “too detailed” tenant screening process. The best property management companies screen tenants thoroughly to minimize the likelihood of rent payment or eviction troubles later down the road.

Interview Tenants

After screening potential tenants, property managers are then responsible for interviewing those tenants to see if they’re still available to fill unit vacancies and to clear up or clarify any remaining questions.

Tenant interviews can be relatively straightforward and fast or more comprehensive, depending on your property manager’s policies and procedures. For instance, some property management companies invite tenants for in-person interviews at their offices. This is more common for very expensive rental units or high-end apartment complexes.

Other property management companies interview tenants by giving them a phone call. In either case, tenant interviews allow property managers to:

  • Ask about previous tenant behavior
  • Clarify where tenants work and how much money they make
  • Make sure that prospective tenants are still interested in vacant units

It’s important to make sure that prospective tenants are still interested in open units because many tenants will apply to several rental properties at the same time. Your property manager must interview potential tenants if they seem suitable; they cannot assume that tenants who previously applied are still interested.

If your property manager does not feel good about a potential tenant after an interview, they may tell you about it. In most property management contracts, your manager is responsible for placing tenants, so you don’t have any say in who gets the offer.

Regardless, all property management companies must adhere to the Fair Housing Act, which prohibits them from discriminating on the basis of protected classes, like sex, gender, ethnicity, and more. In other words, your property manager should screen and interview tenants with no bias and as ethically as possible.

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Call Tenants Back

Should a tenant submit an application correctly, pass the screening process, and pass an interview, they may receive a callback and an offer to live at a rental unit. This is another key responsibility for property management companies.

Tenants have to be told that they were accepted during the rental process if they are to move into your rental units. Property managers are responsible for calling tenants back to give them the good news.

Similarly, property management companies are responsible for calling tenants back to tell them they have been rejected. This is more than a courtesy; in some cases, it’s a legal requirement so that tenants know they can continue to apply to different rental properties and don’t have to wait on one decision.

If you are feeling a new rental property for the first time, many of the above services can be performed and completed in the span of a few weeks at most.

Create Leasing Agreements

After approving one or more tenants, your property manager is responsible for creating (or “drafting”) leasing agreements. The leasing agreements outline the responsibilities, rights, and expectations for tenants and the rental unit providers.

Creating well-written, legally binding leasing agreements is very important. For example, if a lease agreement does not have language stipulating when a tenant must pay rent to the landlord or property owner, that tenant may not be held legally responsible for missing rent payments at all.

Good leasing agreements include many important details such as:

  • What resources and utilities the landlord is expected to provide the tenant
  • How much the tenant must pay in rent and when the rent is due
  • What late fees, if any, apply to late rental payments
  • The eviction process and when tenants can expect the process to begin if they are repeatedly delinquent in late payments
  • Whether pets are allowed and, if so, what the pet fee is
  • Pet policies regarding pet waste cleanup
  • Amenity access for new tenants
  • Community guidelines and rules, such as the level of music that may be played at night
  • Who the tenant can contact regarding repair or maintenance requests

Because leasing agreements are so important, the best property management companies have detailed templates that they use for all of their managed properties. As a property owner, you are allowed to look over these leasing agreements and ask to make changes. But your property management company isn’t necessarily obligated to accept those changes.

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Perform Move-In Inspections

Many property management companies invite tenants to join them for move-in inspections. Move-in inspections are basic overviews of a property prior to a tenant moving into a vacant rental unit.

Move-in inspections confirm that a tenant is pleased with the condition of the unit. Property managers have tenants sign documents stating that they’re satisfied so they cannot claim that they were displeased with the state of the unit later or cause other legal issues.

Move-in inspections are not carried out by licensed professionals. They’re just walk-throughs of empty units that tenants may or may not accept. Tenants don’t usually have to go through move-in inspections if they don’t want to or if they are moving to your rental property from out-of-state/from another city.

Send Out Rent and All Other Notices

Property management services further include sending out rent notices and any other official statements or notices to rental tenants.

For example, if a tenant misses rent by one or two days, your property management company will send them a notice telling them of this fact and warning them that they now owe the late rent fee in addition to the last month’s rent.

Other notices can include:

  • Notices regarding pet waste disposal or pet behavior
  • Notices regarding property upkeep or maintenance
  • Notices regarding upcoming inspections and other official actions so tenants can prepare or plan their schedules around those actions
  • Eviction warnings and notices

Your property manager will send out these notices promptly and oftentimes use emails instead of sending out physical notices. In the case of especially important notices, like late rent or eviction notices, your property manager may send out both physical and digital copies of the same notice to ensure that tenants receive it (also so that the tenant cannot say they didn’t receive the notice in court).

Evict Problematic Tenants

If you have a problematic tenant who refuses to pay rent or abide by lease rules, you may need to evict them. Property management companies provide eviction services in the majority of cases. That’s a good thing, as eviction can be a long, drawn-out, costly process.

To evict a problematic tenant, you cannot simply tell them they have to leave. Instead, you have to make or maintain a paper trail demonstrating:

  • The tenant repeatedly demonstrated problematic behavior, like not paying rent on time.
  • The tenant was notified of their problematic behavior and given the opportunity to correct it.
  • The tenant did not take the above opportunity to correct their behavior.

Only after gathering this documentation can your property manager provide it to the local county judge or sheriff’s office. Depending on local rules and regulations, they may need to provide it to one or both of those offices, as well as file an official motion to evict.

The motion to evict is then delivered by the sheriff to the problematic tenant. The tenant is given a certain timeframe to move out, after which they will be forcibly removed.

While eviction processes are a standard service of property management companies, property managers are not obligated to pay any fees associated with evictions. In most cases, those fees will be charged to you in the form of an invoice or taken out of an eviction reserve fund you set up previously.

Inspect Units Upon Tenant Move-Out

Whenever a tenant leaves a rental unit, your property management company must inspect the unit to check it for damage and to take note of the things that must be done before it can be listed once again.

Unit inspections are important whenever a tenant moves out of a rental unit, whether or not they were evicted or left just because they allowed their lease to expire. Both intentional and unintentional damage can occur inside a rental unit. For instance, a rental tenant’s dog may chew on a bedroom door.

If this occurs, your property manager must inspect the unit, notice the damage, and take note of it so they can take money out of the tenant’s security deposit to pay for the fix. Taking note of damage is important to provide a paper trail that the property management company can give to the tenant if they ask why some of their security deposit was used.

Furthermore, some tenants cause intentional damage to properties when they are evicted. Again, a property management company is responsible for inspecting those units, tallying up the damage, and providing the information to law enforcement in the event that the damage was caused by criminal activities.

Once your property management company inspects vacant units, it can determine:

  • What repairs, if any, are necessary
  • How to clean the units so they are ready to be listed and shown to new tenants
  • How quickly the units will be available for new tenants to move-in

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Collect Keys and Re-Key Locks

Property management services usually include collecting keys from previous tenants. They may also include re-keying locks by changing out the locks and replacing the keys for their units.

Property managers must collect keys from previous tenants so those tenants cannot access the units in the future. This is normally accomplished by directing tenants to drop their keys off at a property manager’s office or at the head office of an apartment complex. Alternatively, tenants may be allowed to mail keys to a security deposit box or other location.

Once collected, your property manager will tally up all the keys, make sure they still work, and decide what to do with unit locks. Depending on their policy, property management companies may re-key or re-lock each unit after a tenant moves out for added security, or they may simply give the old keys to new tenants if security is less of an issue.

Forward Unused Security Deposit Funds

Security deposit funds can only be used if a tenant causes damage to a unit while they live there. If a tenant leaves a unit without causing damage, your property management company is responsible for forwarding those unused security deposit funds back to the tenant.

Tenants are required to provide property managers with information to make this work manageable. For example, your property management company may request the forwarding address for a tenant’s new home so they can mail a check with the security deposit funds to them a few days after they leave.

Financial Services

Property management companies frequently perform important financial services, as they usually collect rent for property owners. Because financial services directly impact the income you can expect from your properties, it’s important to hire a management company you trust. Property management company financial services include:

  • Collecting rent, as well as security deposit funds from new tenants
  • Depositing collected rent payments
  • Requesting late payments from tenants and enforcing late fees
  • Keeping accurate and detailed accounting books
  • Creating and sending annual reports on property financials to property owners

Collect Rent and Security Deposits

Collecting rent is one of the most important services property management companies provide. When rent is due from your tenants, your property manager will collect rent in one of three ways:

  • Collect by cash
  • Collect by check
  • Collect by electronic deposit

In any case, collecting rent on time and counting it to make sure it is all accounted for is one of the primary duties of your property manager. They should do it on the day that rent is due for your tenants, such as the first of the month for whatever other day you’ve assigned.

If one or more tenants have not provided rent in full or at all, your property manager is also responsible for tracking down late payments (see more below). If rent payments are collected physically, they should be stored in a safe or other secure location.

Furthermore, new tenants must usually provide security deposits to cover the cost of potential property damage. The security deposits are legally required to stay in a separate escrow account kept apart from regular rent.

Your property management company is responsible for collecting security deposit funds from new tenants, as well as depositing those funds into the designated escrow account. It is not legal for you or your property manager to use the security deposit funds for any purpose except covering repairs/damages from a new tenant before their lease expires.

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Deposit Collected Rent

Collecting rent is just one part of this important service. Property management companies must also deposit collected rent according to the arrangement you set up with them previously.

Depending on your contract with your property manager, they may deposit rent:

  • In a bank account you can both access
  • In a security deposit box at a local bank branch
  • To your home via a check or cash

In any case, your property manager is responsible for promptly depositing collected rent and for ensuring that the rent reaches you in a timely manner. Your property management contract may state when your property manager should deposit rent after collecting it, such as 3 to 5 business days after your properties’ rent due date.

Chase Down Late Payments and Enforce Late Fees

Property managers are further responsible for tracking down late payments from delinquent tenants or enforcing any late fees that may apply.

For example, if a tenant forgets to pay rent by the due date, your property manager should send them a notice or call them/visit them personally to make sure they know rent is due. They are also responsible for continuing to ask for rent payments and late fees up until the eviction is necessary.

Keep Detailed Accounting Books

Throughout this process, property management companies are expected to keep detailed accounting books, including information like rent collected, rent due, maintenance and repair costs.

Keeping detailed accounting books is important for your financial stability and for your taxes. Good accounting books will help you pay your taxes accurately and quickly, enabling you to make the most of any refunds you may be owed by the government.

Furthermore, detailed accounting books are necessary so you don’t get into any legal trouble with the IRS in the event of an audit. Your property management company may keep physical books or, more commonly, use accounting and tax preparation software like QuickBooks.

Report on Financials Annually

Most property management companies provide detailed reports on your properties’ financials each year. These annual reports contain information like profit margins, expected expenses over the next year, and the percentage of rent collected versus rent due.

Some experienced property managers offer very detailed reports to property owners. As you work with the same company, you can request specific features be added to your financial reports so you can better analyze the health of your properties and make wise decisions.

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Other Services

Property management companies frequently offer additional services that don’t fit into the above categories. Nonetheless, these services provide real value to property owners like you as well as your future tenants.

Provide Sound Advice

Property management companies may provide counseling if they have been in the business for several years and are in a position to offer sound advice.

For example, you may not know whether you should allow pets in your rental properties. A property management company with experience handling pet fees, pet messes, and pet repairs could offer advice one way or the other. They can help you determine whether the extra profit you may make from charging a pet fee will offset the likely costs involved with repairing damage or yard decay from pets.

Maybe you aren’t sure whether you should offer smoking units to tenants or not. Or maybe you aren’t sure what a reasonable grace period might be for accepting rent. In these cases and more, experienced property managers can give you recommendations, which you can agree to or not.

Create and Maintain a Website

Modern renters expected to be able to access their financial and rental information 24/7. To that end, most property managers are responsible for creating and maintaining user-friendly websites and online portals that allow tenants to:

  • Access key information, like when their next rental payments are due
  • Make rental payments online
  • Set up direct deposit accounts
  • Discover FAQ and related information

Creating and maintaining a website is often the responsibility of your property management company. They may create and maintain a website in-house, or it may hire a contractor or web development team to do the labor instead.