Managing an apartment in California is becoming a daunting prospect for most real estate investors as building complexes grow in size. But regardless of your apartment size, everything must run smoothly, from handling tenants to maintaining the building. The role of Apartment Management comes in here.
So, what is apartment management, and how can it benefit apartment owners? What are the costs you are likely to incur when you hire an apartment property management company in California? Read on to get answers to these questions and many more.
What actually Apartment Management is?
Apartment Management is handing over the responsibilities of running an apartment to a third party. Its main goal is to maintain good property owner-tenant relationship while generating income at the lowest cost possible.
An apartment property management company oversees the day-to-day duties of keeping your property well maintained besides handling marketing and filling any vacancy. The firm also takes care of your property’s tenanting, from showing the apartment to prospective tenants to setting rental prices to evaluating tenants and negotiating rental terms and conditions.
Seamless communication is critical to success in apartment management. The property manager becomes the first point of contact for your tenants, responding to their issues, problems, and requests as quickly as possible. Another crucial role of a property management company is keeping you updated on your apartment(s) status and tracking the property’s financials, including expenses, insurance, payroll, mortgages, and taxes.
Apartment management becomes essential when property owners lack the expertise and time to deal with the tenants and maintain the buildings. Absentee landlords, investors with multiple apartments, and those unfamiliar with federal regulations governing affordable housing can also enlist apartment management services.
What does an Apartment Property Management Company Do?
- 1. Preventive Maintenance
- 2. Routine Maintenance of the Society
- 3. Emergency Maintenance
- 4. Vendor Management
- 5. Following the Housing Laws and Policies
- 6. Maximize Value of Your Property
- 7. Securing Your Apartment
- 8. Dealing with Vacancy and Tenant Screening
- 9. Resolving Apartment Resident Complaints
- 10. Lease Agreement and Security Deposits
1. Preventive Maintenance
An apartment management company stays abreast of best maintenance practices, keeping away hefty damage repairs and renovations while maintaining a competitive edge over competitors.
The experts set up monthly and annual maintenance schedules that may include:
- Inspecting and cleaning HVAC systems
- Cleaning gutters
- Checking for cracks and leakages
- Pest control and prevention
- Drain and plumbing maintenance
- Water management
- Inspecting and cleaning fireplaces and chimney
Your apartment management company not only identifies the maintenance gaps but also outsources the tasks to the right professionals, including landscapers, plumbers, HVAC technicians, and other contractors. It is also the firm’s responsibility to keep an accurate record of the preventive maintenance expenses.
2. Routine Maintenance of the Society
Your property needs proper attention throughout the year. A vital responsibility of an apartment manager is to maintain stable relationships between apartment owners and tenants. Part of this objective is streamlining communication to offer a superior tenant experience and create an overall active community. This includes keeping a directory of each tenant to reach them seamlessly. There cannot be a delay in fixing water leakage and faulty electrical appliances.
The property manager keeps track of the apartment’s regular inspection of the property and looks into repairs instant.
3. Emergency Maintenance
Despite your apartment(s) being in top condition, there is always a possibility that your renters will contact you with an emergency maintenance problem. And while many property owners struggle with routine maintenance, emergency maintenance can be utterly overwhelming.
Apartment emergencies include fire outbreaks, power loss, A/C failures, water leaks or floods, lockouts, and gas leaks.
A reputable apartment management company brings experience in addressing emergencies. Part of this is keeping an updated list of vendors to contact in case of emergencies. And outlining safety guidelines for residents, including getting to safety if the crisis compromises their safety and health, resetting circuit breakers, and turning off the main water line to your apartment.
4. Vendor Management
Vendor management is critical to quick maintenance resolutions, better maintenance, cost management, and an overall clean and safe environment for your tenants and staff.
A competent apartment management company keeps a record of contractors who provide competitive pricing for each service and resolve particular issues in your property, so you and your tenants also know exactly who to contact with a specific problem. The documents also include the contractors’ service quality and pricing, response time, and tenant’s satisfaction level with the services.
5. Following the Housing Laws and Policies
There are state housing law program rules and regulations governing housing in California. The laws cover landlord disclosures, security deposit limit and return, late fees, tenant rights to withhold rent, landlord access to rental property, termination, and eviction. The management company representatives should also be familiar with federal housing laws.
By understanding and following these laws, your tenants and apartment management company agents can address legal concerns and other problems without lawsuits or always involving a lawyer. A property management company often involves an experienced housing attorney in California to guide them through individual policies and get unbiased advice on specific property-related actions they wish to take.
6. Maximize Value of Your Property
Competent apartment management companies in California also implement ways to increase the profitability of their apartment portfolios.
A few tricks to maximize apartment value include;
- New paint job and cleanup
- Upgrading bathrooms and kitchens
- Adding en suites, and
- Adding more space for additional rental rooms
- Offering extras such as energy-saving appliances, state-of-the-art security systems, and interior décor.
The management company can also redesign your property to support the needs of specialized rental markets ready to pay more.
7. Securing Your Apartment
Owning an apartment guarantees you financial security, but failing to secure the property against catastrophes may set the stage for future financial ruins. Cognizant of this risk, a trusted apartment management company will partner with an attorney and property insurance agent to get custom insurance coverages specific to your property’s needs.
Among the risks covered by apartment insurance include:
- Catastrophes, including storms and fires
- Loss of rental income
- Theft and vandalism
- Liability for tenant, staff, and visitor injuries, and
- Water damage
- Advertising liability
8. Dealing with Vacancy and Tenant Screening
Among the most valuable expertise, a California Apartment Management Company can bring to the table is sourcing the right tenants for your property. The firm sets out by advertising vacancies on online property listings or print media, listing essential information such as apartment details and your contact information. The next step is screening potential tenants, running background checks on them, and ensuring they are financially sound to rent your property.
9. Resolving Apartment Resident Complaints
Resident complaints are an inevitable part of running an apartment. But amicably addressing the complaints is critical to maximum tenant satisfaction.
Reputed property managers understand that being calm, professional, and understanding incredibly impacts their ability to solve resident complaints successfully. It involves listening to the complaints and asking follow up questions to get deep into the matter. But this cannot be achieved without the manager being accessible to the tenants. The professional must also show genuine concern, regardless of what they feel about the tenant complaints’ validity. And resolve the issues in a timely and professional manner.
10. Lease Agreement and Security Deposits
An apartment management company not only sources and screens tenants but also drafts lease agreements that outline terms and conditions to be agreed and observed by the involved parties. Among the vital details included in the contract include:
- Tenant’s and landlord’s names and signatures
- Renting starting and ending dates
- Rental prices and due dates
- Ways to deal with repairs and complaints
- Security and lease termination policies
- Resident’s responsibility to maintain the unit and pay for negligent damage
The apartment manager also sets, requests, holds and returns security deposits in line with the federal and state housing regulations.
The Cost of Apartment Property Management
Cost remains a critical concern for property owners getting started with apartment property management. Property management fees in California vary with the type of property, location, property condition and size, and the scope of the management services.
1. Typical Fee Agreement
Conventionally, property management companies charge somewhere between 8% and 12% of your apartment’s total monthly rental value plus expenses. Eight percent is a pretty good rate. But 12% may seem a bit intimidating; however, it is a reasonable rate for a competent property management company whose expertise and services justify their price. However, some property managers charge a flat fee.
2. Other Possible Fees
» Tenant Occupied Unit
Some property management companies charge a reduced fee or zero fees if an apartment is vacant.
» Vacant Unit
A property management firm can charge you a month’s rent upfront, especially if you engage them when your apartment is unoccupied. This fee covers advertisement costs, commission for sourcing tenants, and lease agreement preparation.
A company with its maintenance crew often includes routine maintenance services in its monthly packages. But it is up to you to negotiate the maintenance services and their extra cost. But most importantly, ensure the property management contract outlines the maximum maintenance fees the property manager can charge you.
» New Tenant Acquisition
Some apartment management agencies charge for each new tenant placement, usually lower than 50% of the new tenant’s first rent. But you will want to avoid a firm with multiple up-front fees unless their ongoing monthly expenses are extremely low or zero.
» Late payments
Property managers can charge 25% to 50% of the late fees charged on delayed rental payments.
Sometimes evictions become inevitable, especially when dealing with irresponsible tenants or those unable to pay rent. A property manager may charge you a particular fee for the rigorous eviction process. The fee is usually a few hundred dollars for each eviction, plus associated legal costs.
» Early Contract Termination
Should you break the apartment management contract early; the property manager will charge you an early termination fee.
Landlord Vs. Apartment Property Manager: Weighing Your Options
You require a perfect combination of interpersonal skills, knowledge, and patience to be a successful apartment landlord. However, an apartment management company brings a wealth of expertise and professionalism to your property, saving you an incredible amount of time and stress. The following are a few benefits of listing the help of an apartment property manager in California.
Higher Quality Tenants
Property managers boast the experience to thoroughly screen prospective tenants to ensure their reliability and weed out the troublesome ones.
Shorter Vacancy Cycles
A competent management company will do everything possible to reduce the amount of time your property stays vacant and offer you maximum satisfaction.
An experienced apartment property manager can smoothen all processes associated with your apartment, from rent collection to maintenance. By streamlining rent collection, the professional helps maintain consistently positive cash flow critical to sustaining profit generation.
Fewer Legal Problems
A good apartment property manager is conversant with California and federal laws and can leverage their experience to keep you away from time-consuming and costly legal problems.
You relieve a heavy burden off your shoulders by listing the services of a professional property manager. Still, you get more time to focus on other important business matters and personal development endeavors.
How to Find the Right Apartment Property Management Company
Keep in mind the following checklist to land the right management company for your property:
- Positive customer reviews: Visit the company’s social media accounts and website to see what previous customers say about its management services.
- Proven profitability: The company should demonstrate their ability to generate profits for the clients.
- Licensed and certified: Check whether the firm is certified by or licensed by trade organizations such as the National Association of Residential Property Managers, National Apartment Association, and Institute of Real Estate Management.
- Automation: Automation helps streamline property processes, saving large amount of time and money. Check the company’s reliance on maintenance and accounting systems.
- Assistance: The prospective company should have healthy relationships with local contractors. Some companies have their own maintenance crew.
Do you own apartments in California? What to Expect in 2020?
Several apartment markets in California rank among the top winners for rent and demand growth in 2020. Apartments with more amenities and features continually experience higher demand. Therefore, it is not surprising that 40% of real estate investors in the US prefer to invest in apartments compared to other housing types.
According to RENTCafe, the average rental price for an apartment in California is $1,420, up 3% from last year. Still, the price is higher than the national average of $1,381.
Looking at California’s largest cities, San Diego and Los Angeles rental prices rose by 3.6% within a year, reaching $2,238 and $2,545, respectively. Among the California cities that recorded the highest increase in rental rates include Sacramento, West Covina, Long Beach, Murrieta, Mountain View, Burbank, Roseville, and Escondido.
As the number of renters continues to creep up in California, so will the rental rates. In 2021, apartment owners will still enjoy the chance to earn more income per rental as the state’s economy and housing demand grow.
Save Time Managing Your Apartments with RTI Properties Los Angeles Property Management
Are you looking to invest in the California apartment market? It could be your best 2020-2021 investment decision as apartments still retain the potential to generate incredible profits.
But the secret to cracking it in apartment investment lies in partnering with a competent property management company. You save time, money, and stress of managing your apartments on your own and enjoy the peace of mind that your rent will be collected in time. That is precisely what you get when you partner with RTI Properties Inc. To learn how we can help you with our property management services, contact us online, or more conveniently, call us now at (310)-532-5994.