Should You Hire a Property Manager?
If you have recently bought an investment property, congratulations! Purchasing a home in Philadelphia that you can rent out can be a rewarding long-term investment and a great source of passive income. Whether you have recently purchased, or inherited a property, or are just starting to think about investing in one, you should consider your strategy for maintaining the property and making it a safe, welcoming place for your tenants to live and call home.
Do you want to be a landlord and do you have the time to dedicate to it? It’s crucial to ask yourself: “How involved do you want to be?” This will help you determine how best to proceed with managing your property. Besides showing the home, finding responsible tenants, and collecting rent, someone has to be on call to handle problems that inconveniently arise on weekends and holidays.
Hire a Property Manager Vs D.I.Y
If you have the time, as well as contractors like electricians and plumbers on speed dial, you may want to consider managing your property yourself. But if you need to focus on your career and your family, hiring an experienced property manager may be ideal. Below is a list of some of the most common responsibilities Solo typically handles for their property management clients:
Property Manager Responsibilities
- Screen and credit check all tenant applicants
- Respond quickly to repair requests
- Apply for required licenses
- Register with PGW and utility providers to exempt owners from unpaid tenant gas bills.
- Schedule annual fire alarm inspection, upgrade, and certification
- Solicit bids for insurance coverage
- Arrange for maintenance of heating and AC systems
- Contract for snow removal
- Hiring various contractors and suppliers to handle repairs
- Securing keys
- Collecting rents, doing banking, paying expenses, and accounts
If the list seems overwhelming, consider the value of hiring a property manager. Every property and every person is different — so while you may be comfortable applying for city licenses, perhaps there are better uses for your time than hours spent soliciting bids, and managing contractors. It’s important to look for a company that will offer a range of services and will work with you to meet your needs. We understand your needs may not be the same as those of other owners, and we tailor our services to the individual owner.
Questions to ask a property manager
When choosing a property management company, here are the first three questions you want to ask them:
- How many properties do they currently manage and how long have they managed their properties?
- What is the average length of time it takes to place a tenant?
- Where are the properties they manage located?
Ideally, you want a management company familiar with the neighborhood in which you are investing and one that manages properties similar to yours in price range.
First impressions count. If possible, meet each property manager in person and ask yourself: “Would you want to rent from this person?” If the management company has a website, does it inspire confidence and reflect your values? Finally, check the state’s Real Estate Commission and the Better Business Bureau to make sure your prospective property manager is licensed and has no complaints against them.
Negotiating terms of the contract
Make sure the monthly management fee, as well as the rental fee for placing a tenant, are documented. How many days’ notice does the property manager require to terminate the relationship? You want to be able to terminate their services within 60 days, which will give you enough time to find a replacement if need be.
Your contract should state when should you expect to receive payment each month. Typically this is monthly and will include a statement of expenses. Your contract may also state how the security deposit will be handled. In our case, the owner can keep any prior prepaid deposits. For new tenants that we place we hold the security deposit according to the laws of escrow in a separate insured account.
- How will they handle tenant repairs? Your contract will state whether the company has on-staff maintenance employees or if they have a network of contractors they hire to handle repair requests.
- How are late rents handled? Typically property management firms will send late payment notices after the first few days of the month. At Solo, they are sent out after the fifth of each month and the owner is subsequently notified.
- How will the manager deal with a delinquent tenant? Each management firm has its own protocols. Our policy is to try to work with the tenants to develop a repayment plan so they can pay it back in installments.
- What are their eviction proceedings? It is an owner’s decision if they decide to start eviction proceedings. If necessary, we will use a landlord/ tenant attorney to handle evictions. Luckily our tenant screening process is comprehensive enough that we have an extremely low eviction rate.
- What are the consequences of breaking the lease? It is common for there to be a termination fee if an owner decides to terminate the contract.
The Solo Advantage
Solo Real Estate has 70+ years of experience as a property management company in Philadelphia and a proven track record of managing single-family homes, duplexes, multi-family homes, and condo associations. We recognize that investing is about generating wealth, but that doesn’t mean you have to compromise on integrity. At Solo, our goal is to improve the wide tapestry of neighborhoods, maintain the character of their built environment, and renovate and restore in the most sustainable ways we can.
Since the sales market has clearly begun to shift, it is likely that many more would-be sellers are going to pivot to renting their properties soon,” said Solo agent Alex Franqui. “Our expertise is invaluable for these owners as we know the laws and regulations, and can help them through the process of getting necessary licenses, preparing their property for tenants, and finding qualified tenants.”
“Not only have we encountered many different challenges in terms of tenants and buildings over the decades, but we have cultivated relationships with dozens of reliable contractors and vendors necessary to effectively maintain properties and relationships with tenants,” he said.
If you are interested in investing in a property, Solo has the experience to expertly guide you through both the purchase and management process. Contact us for a free consultation and tell us about your needs. We won’t just help you find the right investment but help you keep it sound and growing through the years.