what do property managers do? and (maybe) why you might need one…

What exactly is property management and (why maybe) do I need it?

Property Management is a relatively new field of occupation. Practically speaking, it is the business of managing and overseeing the rental and maintenance of residential, commercial, industrial, land or farm real estate that is owned by another party – whether private owners or companies.

Typically property managers oversee property types such as condos, apartments, townhouses, single unit dwellings, multifamily units, commercial space such as stores, office spaces, storage units, industrial real estate, and rural real estate such as raw land, development lots and farms.

How does property management work?

Property management is aimed at allowing the owner to enjoy the upsides in real estate investments without the hassles and work entitled in maintaining and running rental properties.

In other words, property management is supposed to allow for a carefree home owner experience and to gain passive income from your investment. 

How much do property management services cost?

Property management services prices differ depending on the type of management required, the amount of properties needed to manage and other services required.

In general lines there are 4 main models of pricing in property management:

Fixed price

This model is usually applicable in cases where the property owner is absent for all or parts of the year and they do not want to rent the house while gone. This model is also used for land watching services aimed at securing land from squatter threats.

Percentage based

In this model, which is the most common of all pricing models in Real Estate Management, management fees is based on a percentage of gross rental income. Percentage is decided upon the kind of management needed and the amount of properties.

Fixed Income

In this model property managers will guarantee owners a fixed income (usually much lower than market value) and pocket the difference (if made) on rental actually received.  

Percentage split

This model is sometimes seen in commercial property management where management companies will receive part or all of the payment as a percentage of business growth.

For more about pricing and management fees visit our Real Estate Management Fees & Prices Page.

What does a property manager do?

A property manager, in the traditional sense is required to manage property maintenance (see that the property is well kept including services such as pool cleaning, gardening, repairs and so forth), coupled with maintaining the property rented, receiving and depositing income, payment of bills and so forth.

For more info on property management services.

The property managers 6 main tasks are:

1. Marketing

In today’s rental market marketing is probably the most important aspect of property management, much more so when dealing the highly competitive world of vacation rental management (and even more so in Costa Rica’s paradise housing off the beaten track).

2. Renting

Dealing with rent is the second first most important thing. The property manager’s main function is to keep permanent positive cash flow generating from the properties to the owners. In order to do so he must deal with finding tenants, screening tenants for acceptable matches, collecting rent and depositing proceeds for owner.

Moreover, the property managers job is also to help the owners by setting optimal pricing and readjusting rates when possible.

Higher rental income is key for determining value for future sales possibilities.

3. Tenant management

Another important part of day to day property management is dealing and managing of tenant relations.

This includes:

Finding tenants:

In today’s market finding tenants is a complicated task requiring marketing skills and modern technique coupled with old school street smarts and local real estate knowledge and experience. A property manager needs to use all possible tools to find tenants and to show the property on demand.

Screening tenants:

Tenants should be sufficiently screened to insure continued and harmonious uninterrupted rent flow. Property managers should also collect sufficient security deposits and guarantees to protect against losses on utilities and other possible damages.

Collecting and Depositing Rent

Rent should be collected in a prompt monthly manner allowing for maximum economic efficiency. Property managers should also enforce late fees.

Managing contracts and renewing leases

Another important function property managers handle is the writing and renewing property leases, including negotiations, securing security deposits and all necessary precautions to protect owner interests, and renewing of leases.

Tenant changes

Property managers also need to physically accompany all entrances to a rental unit and also evacuation of a unit or tenant move outs in order to secure that all is in order, nothing is owed and security deposit may be returned. 

Emergencies and repairs

Another part of tenant management is day to day dealing with repairs big or small and other various tenant needs.

Evictions

Unfortunately sometimes evictions are necessary and also fall under the property manager’s job description.

4. Property Supervision

Another important job that a property manager undertakes is periodical supervision of the properties whether occupied by tenants, and even more so during periods when unoccupied.  Supervision is also applied to vacant lots and unoccupied land in order to avoid possible squatter problems.

5. Property maintenance

 Property managers, aside needed repairs, are also tasked with general property maintenance, whether personally or through contractors, as agreed upon in the service contract, including gardening, landscaping, pool maintenance, fencing, arborist services and so forth.

Furthermore property managers can also be tasked if agreed upon to provide general property improvement jobs such as painting, remodeling and other small construction tasks needed to improve the property potential.

Payment of bills and depositing income

The property manager may also be entrusted to deal with the payment of bills and also payment and filing of taxes. Moreover he is expected to keep detailed accounts of all spending and income and to forward monthly reports to the property owners.

What is the difference between traditional property management and vacation rental property management?

Vacation Rental Management is a new field of expertise in the property management business requiring different logistic and marketing capabilities; therefore not all property managers offer vacation rental management 

Furthermore, when dealing with vacation rentals, the work does not only deal with the renting and marketing of properties but also in providing extra added value as a host to the guests, helping in all issues – not only property related – but also on other services, transportation, local info and recommendations and much more.

This mix of capabilities must be present and also a readiness to be accessible in all hours of the days (and nights).

For more info on Costa Rican Vacation Property Management.

Squatter rights in Costa Rica – another good reason for property management….

Squatter rights in Costa Rica are an issue and if not dealt with directly may lead to loss of property. Simply stated, if a property owner allows someone free use of his property for more than one year (and sometimes less….), that person may claim ownership rights and even outright ownership over time.

That includes the may even include the guy you asked to take care of your place, a live in girlfriend, and even an of the books employee.

Among the services we offer absentee property owners is watching of houses and land to guard against possible future squatter issues.

To read more about land watching services.