As with most services, there’s two basic questions that owners have regarding property management:
- Process: What do you do?
- Pricing: What does it cost?
While there are dozens of activities that go into property management, they all fall within one of four phases which we refer to as The Resident Life Cycle. By taking the time to understand the four phases and more importantly the policies and procedures that a property management company has set in place an owner will have a better idea if it will be a good fit in working together. This blog is intended to answer the first question and give you an overview of the phases and what is involved. For the second question please reach out to us and we can provide you with pricing.
PHASE ONE: LEASING
You are open for business! However, a business without customers will not be a profitable venture. The first step is to find a new customer that will move into your rental home and pay you rent. Phase One has four key tasks that will lead to Leasing Success:
- Task #1,Marketing: The property must be listed in the marketplace in the right platforms for maximum exposure. A perspective renter will need to make the decision to schedule a showing, but they must first find the property online.
- Task #2, Showings: Once a renter has found the property online, the property needs to be shown as quickly and efficiently as possible. The goal is to get the greatest number of appointments in the shortest amount of time that will generate applications. Once applications are received then they need to be reviewed and an applicant needs to be selected.
- Task #3, Screening Applicants: Once an applicant has been selected then the applicant(s) must be screened. This is one of the most crucial checkpoints as the profitability of the investment relies on the stability of the income stream which is tied to… the applicant. Diligence must be taken to vet the applicant as best as possible. Once the screening is completed then the lease must be signed and move-in funds paid.
- Task #4, Resident Move In: You now have a new customer and must plan for the big move-in day.
PHASE TWO: RESIDENCY
Success! You now have residentsin your rental home paying you rent. Every month that the rental home is rented there are four key tasks that must be completed:
- Task #1,Rent Collection: How will you collect rent? Is it via mail? Direct deposit? An online platform?
- Task #2,Paying Expenses: Paying bills is part of operating a rental property. Common bills are mortgages, property taxes, insurance, HOA dues, utilities, maintenance, etc.
- Task #3,Accounting: Good record keeping is a must to be able to keep track of the financial performance of the investment.
- Task #4,Maintenance: This is a cornerstone of operating rental properties.
PHASE THREE: LEASE RENEWAL
At some point the term of the lease that is in place will run out and a new contract will need to be negotiated. There are several steps that need to be taken before Renewing the Lease.
PHASE FOUR: MOVE OUT
All good things must come to an end. At some point your residents will be moving out and there are several key questions that will need to be answered such as when will the property be put back on the market, are there any improvements that will need to be done during The Turn Process, how to best process the security deposit refund and more. The key here is having a strong plan in place to minimize the vacancy and get a new paying resident in as quickly as possible.
CONCLUSION
The key to operating a successful property is having strong policies and procedures for each of the four phases of The Resident Life Cycle. If you are on the market to hire a property management company it is important to ask them what their policies and procedures are revolving each of these phases.
