Apartment building management is considered to be the management of a multi-unit rental property and the residents or tenants who occupy it. These properties can range from small multi-unit buildings to very large complexes housing hundreds of residents. Residential property management is a term used more by the industry and could include the management of single family homes as well as apartment complexes.
As you can imagine, managing these types of properties can become quite complex and time consuming compared to managing a single family home. Many apartment building owners don’t have the time, expertise, or desire to manage them themselves. In these cases, it is recommended that you hire a qualified property management company that specializes in apartment property management.
Responsibilities of an Apartment Manager
Here are some apartment building management responsibilities that might be required of anyone managing an apartment building:
- Collection of rents
- Show available units to potential tenants
- Credit and background checks
- Launch of rental contracts
- Follow-up and processing of lease renewals
- Enforce the rules of a tenancy agreement
- Dealing with Breaches of a Lease Agreement
- Managing an eviction from start to finish
- Mediator in case of disputes between tenants
- Grounds maintenance
- Safety and security of the premises
- All types of maintenance issues or repairs you could think of
- Knowledge of landlord/tenant law
- Knowledge of fair housing laws
Not ready to manage your apartment buildings yourself
The good news is that you can enjoy all the financial benefits of owning these types of properties, but you don’t have to deal with the management responsibilities of managing them. Some apartment building investors, however, may choose to take on certain responsibilities themselves. It’s a great way to educate yourself, learn from real-life experience the ins and outs of real estate investing, and of course, save some money. That being said, we strongly recommend that you seek legal advice if you are unfamiliar with landlord/tenant and fair housing laws in your state and at the federal level.
Hiring an apartment management company
There are many management companies in your area that are well qualified, licensed, and familiar with municipal, state, and federal laws regarding landlord and tenant responsibilities. If you are ready to delegate the management of your building today, we recommend that you interview several management companies. Having a property manager on-site at your apartment complexes is a good idea, especially when you can’t oversee the maintenance and rental activities that come with owning larger properties. Often, on-site apartment property managers who maintain apartments will receive their own apartment as part of their compensation.
Questions to Ask Before Hiring a Property Management Company
Experience – How long in business. Does the management team have a proven system for streamlining operations such as maintenance repairs, spot checks, rental depots and communication channels? More and more companies are allowing landlords to access their real estate account information through a website portal. Here you can view your statements, repairs or rent deposits, etc.
Credentials – Does the apartment management team have any licenses or certifications required by state law? Unfortunately, every state license requirement is different. We always recommend that you use a licensed property manager for all of your rental needs, whether or not the state is required.
What percentage of their management portfolio are apartment complexes. If 90% of their portfolio manages single family homes, you might want to consider hiring one with more experience managing larger multiple units.
Get referrals – Always ask for an up-to-date list of properties they manage (do drive-throughs) and talk to other owners who are their clients.
We suggest you hire a local real estate attorney to review the manager/landlord agreement and landlord/tenant agreement. And don’t be afraid to ask for changes if necessary.
And review all the fees involved in managing your property. Installation fees, lease renewal fees, do they impose a markup fee for service/repair calls, etc. Also find out what their cancellation policy is. Once you think you’ve answered all of your questions, ask, “Are there any other charges I should know about that we haven’t discussed that might affect me?”
Invest in apartments to earn money
Investing in apartment buildings is a great way to build up real estate assets. Typically, these types of properties generate good cash flow for the investor compared to single-family homes where value appreciation may be more common. When qualifying these types of properties for your portfolio, you will want to consider the passive income that will be generated as well as the expense ratio. It’s all about numbers. A good apartment management company should be able to help you with your decision making.