Whether you own rental properties and are looking for a good property manager, or you are a real estate management company looking to hire property managers, or even a rental owner who wants to learn how to improve your own skill sets to start your own property management business, this article is for you.
I will break down the four core competencies that one must possess in order to effectively and efficiently manage a rental property. Without these four skills, a rental property will likely struggle in multiple areas, including, but not limited to:
- Higher rates of evictions
- Lower occupancy rates
- Higher turnover rates
- Lower renewal rates
- Difficulty with rental increases
- Lower tenant satisfaction rates
If you don't want to struggle in these areas, then let's continue.
Expertise in Marketing Vacancies
One of the most important management services that a good property manager should be able to provide is the ability to effectively market rental vacancies and keep the rental applications flowing to sustain high occupancy rates.
If occupancy rates drop too low, that means cash flow slows down to a trickle. And if cash flow slows down to a trickle, then it's a domino effect that impacts every other aspect of the management process.
In order for a property manager to be an expert at marketing vacancies, there are a few core skills they need to possess:
Market Knowledge
A good property manager should have a firm understanding of the market in which their rental properties are located. Tactics and strategies that work in Austin, TX, will not necessarily work in Houston, TX, and vice versa. What works in Miami, FL, will likely not work in San Diego, CA.
Adaptability
Things change fast in the rental industry. One minute, it's a hot market; the next, it's freezing cold. One year, it could be a renter's market; the next, it could be a landlord's market. Things are easy when it's a landlord's market, but when tenants have all the options (and leverage), things get a little more complicated.
Learning how to pivot with the market and adjust strategies and marketing tactics is essential for a good property management company to understand. A good property management company will be successful regardless of the market in which it operates.
Automation
In the third millennium, we have access to incredibly powerful software that can automate a significant number of our day-to-day routines. A good property manager knows how to harness the power of technology to the advantage of their team.
A good property manager also realizes that automation is not a replacement for anything. It simply complements the work being done and allows individuals to focus on the tasks that yield more valuable results when they can commit more time to them.
Proficiency in Screening Tenants
An experienced property manager should be a master of the tenant screening process. They should know how to set rental criteria, identify red flags, and know when to dig deeper.
Beyond that, they should also know how to draw in the right prospective tenant. This starts with being a solid rental marketing agency; it ends with transparency. If a property manager does not understand the screening process, it could result in unqualified or poorly qualified candidates being approved, or worse—costly fair housing or FCRA violations.
Evictions, lawsuits, and a general increase in exposure to risk are all likely scenarios if the residential property manager does not understand the tenant screening process and the accompanying responsibility.
Attention To Detail
Attention to detail is an absolute must in the rental industry. With the myriad network of federal, state, and local laws that govern the screening process, property managers must remain up to date on the dos and don'ts of tenant screenings.
Compliance & Communication
With those laws come compliance issues and communication requirements. All of these are things a property manager must be aware of and abide by. Whether it's eviction notices, lease violations, final statements, or any of the other numerous documentation requirements, any missteps can be incredibly expensive.
Interpersonal Skills
Of course, a good part of the tenant screening process is knowing how to work with applicants, understanding any idiosyncrasies with their situation, and being able to communicate effectively to ensure that the applicants are comfortable with the application process from start to finish.
- Attention to Detail: Carefully evaluating tenant applications to identify red flags and ensure a reliable tenant selection.
- Fairness and Compliance: Adhering to all legal standards, including fair housing laws, during the tenant screening process.
- Interpersonal Skills: Building rapport during interviews while maintaining professional boundaries.
Efficiency in Collecting Rent
Ah, rent collection time—undeniably the highlight of the month for rental property owners everywhere. For many property managers, this is also the bane of their existence because of the difficulties often associated with collecting rent from some of their tenants.
The truth is, this part of the rental management process is relatively easy if the first two skills we've already discussed are a solid part of the property manager's repertoire.
See… if the property manager is already good at marketing vacancies, then the investment property should have normal or near-normal vacancy rates. If the property manager is good at tenant screening, then they should find highly qualified applicants and weed out poorly qualified ones.
This means on-time rent payments without having to remind anybody, assuming there are no outlying circumstances that simply could never be accounted for (e.g., the renter is laid off, files for divorce, etc.).
Rent Collection Tools
These days, it's as easy as it's ever been to collect rent and set up a system that nearly puts it on autopilot for the vast majority of tenants. This is where someone who understands property management will find the best rent collection tools and put them to work the way they're designed to be used.
Give tenants the ability to pay with credit, debit, or even ACH. Enable autopay options, allow tenants to report their rent payments to the credit bureaus, and whatever else makes life easier for tenants to pay rent. These are all things that a good property manager does instinctively.
Conflict Resolution Skills
It doesn't matter how good a property manager is at what they do; Inevitably, they will encounter issues with collecting rent from a tenant here and there. This is where conflict resolution and customer service come into play. Enforcing lease terms, sending out the proper notices on time, documenting the paper trail, and having hard conversations with tenants are all part of the job.
Tech Savvy
Beyond just selecting the right tools, a property manager also needs to be tech-savvy. Understanding how the tool works, the features and functionality that they have at their disposals to detect issues, track payments, understand payment failure codes, etc., are all part of the rent collection process.
If the property manager is not naturally tech-savvy, then this is where solid support teams come into play, as well as adequate training on the tools they need to use on a daily basis.
Diligence in Maintenance Management
Nothing turns tenants away faster or causes current tenants to leave quicker than poorly managed rental property maintenance. The often-overlooked reason why tenants don't lease or won't renew is the fact that the maintenance management at the rental is sub-par.
That's a hard pill for some to swallow, but it's true.
And you don't have to take my word for it.
Numerous studies and surveys over the years have determined that things like 24-hour maintenance guarantees, and well-kept properties are determining factors of whether a tenant leases somewhere, and whether or not they stay.
A good property manager understands that to be true, and so they place an emphasis on quality maintenance management at their rental properties.
Proactive Approach
They set up routine inspections; they regularly walk the exterior of the buildings; they send out lease violations to tenants who leave trash bags outside the property; they fix gutters before they cause water damage to the siding; and much more.
Vendor Management
A good property manager understands the importance of good vendors. Because they understand that, they find high-quality vendors, and they know how to keep them around by doing things like building relationships, communicating efficiently, paying invoices on time, following up immediately when they identify issues, and so on.
Tenant Satisfaction
Last but not least, a successful property manager understands that tenant satisfaction is paramount. They ensure that each and every reasonable maintenance issue is addressed, and they follow up to make sure that the repairs are satisfactory.
They communicate if there are any issues, such as part delays, time constraints, or other external factors that are out of their control, and they come up with a solution.
As a result, their tenants understand that when things do go wrong (and they will), their property manager has their best interest at heart.
Cross-Cutting Skills and Qualities
In addition to those core skills, a great property manager should also be current with relevant industry certifications. In most cases, if the property manager does not already possess them, they can be acquired while on the job.
That ensures that the property manager is up to date with the latest property management standards, operations, and procedures in the industry.
A few other soft skills that a property manager should have are:
- Communication Skills
- Organizational Skills
- Investor Mindset
- Decisiveness
- Be Driven
These are interpersonal skills, personal attributes, and cognitive abilities that allow someone to effectively manage people, tasks, and their own mindset/motivations.
In Summary
In summary, the skills that determine whether a property manager is 'good' are:
- Expertise in Marketing Vacancies
- Proficiency in Tenant Screenings
- Efficiency in Collecting Rent
- Diligence in Maintenance Management
These are the skills that property management companies get paid for because, frankly, most people don't have these skills or simply don't have the time or desire to acquire them.
Beyond that, the property manager should be up to date with any relevant industry certifications to round out their role in successfully managing rental properties.
And THAT is what makes a good property manager!
