Simply stated property management is the oversight and accountability of a piece of property. In real estate, when a client owns or is involved in leasing a piece of property there is usually a need for property management.
Property management is considered a “real estate” activity in some states (including Utah) and does require a broker’s license. However, there are some exceptions and this does not apply to an owner who manages their own property.
Here are some basic property management duties:
- Screening applicants – Credit and background checks, rental history and ability to pay rent
- Facility management – Maintenance issues, inspections, remediation and mitigation
- Contracting and payments – Producing legal contract documents, facilitating rent payments
Many of the leading property management companies offer a much larger scope of services including: Competitive market analysis, online accounting, financial reporting, and more.
So how do you know if you need it?
Whether it’s a lack of time or expertise, most clients do not want the headaches of dealing with issues that they know very little about. When considering your options, ask yourself these questions:
- Who is going to help my tenants when I get a maintenance call at 3 a.m.?
- What if they don’t pay, who is going to help me collect rent?
- What location would be a good real estate investment based on the surrounding market?
If you don’t know the answer to these questions then I would highly recommend you consult with a trusted property management consultant today.