Whether you own apartments that you rent out or you’re one of the folks who rents those apartments to live in, you may be curious about what a management company does. With over 100 years under our belt as a real estate company in Chicago, we know a thing or two about the business.
In general, a management company takes care of an owner’s rental properties, from maintenance to rent collections and beyond. That being said, the services of management companies vary, depending on their size and experience. Realty & Mortgage prides itself on being one of the most comprehensive management companies in Chicago.
Why a Property Management Company?
Property owners basically have three choices when it comes to managing their properties: they can do it themselves, they can hire a single resident manager, or they can partner with a management company like Realty & Mortgage. There are many different aspects that go into making this decision for owners. If it’s just one apartment or a small building, self-management or hiring a resident manager might be a cost efficient way to deal with management of the property. But beyond a small handful of apartments, management can get tricky and the expense of working with a management company can be more than compensated for by the services it provides.
Here are the top reasons we find that owners choose to employ property management companies:
- They own multiple buildings or many apartments in a dispersed area. The more units you own, the tougher it is to manage yourself. Also, even a small group of properties can be difficult to manage if they are not in the same building.
- The owner does not live close to their properties. Sure, it’s possible to manage an apartment from the next state over, but it’s definitely not easy. When repairs need to be made, the owner has to either hire local tradespeople sight-unseen or trust their tenants to do so. When it’s time to rent out the apartment, they either have to travel to meet potential new tenants or, again, rent out the apartment without meeting tenants. Yikes!
- The owner has a career separate from managing their properties. A burst pipe is flooding the third floor of an owner’s building but he’s doing his job in court as an attorney or in the middle of a board meeting or flying to a meeting out of state. If an owner can’t immediately respond to emergencies anytime or the day or night, we highly recommend that they get outside management to protect both themselves and their investment.
- Owners don’t want to be employers. When an owner hires a resident manager, the owner becomes an employer, which comes with its own host of legal and operational issues. Conversely, a management company is a contractor, not an employee.
Renting Apartments in Chicago
The first thing on our list of duties is probably the one that everyone would guess: we help owners rent out their properties. For owners, this can be a huge relief. No more placing Craigslist ads and worrying about who might (or might not) show up to see an available apartment. No more carving time out of an owner’s already busy day to let people in to see available apartments. We handle all of that. Especially for owners of multiple properties, this feature alone is worth hiring a management company.
Of course we also process rental applications, handle communication with new tenants about move in dates and expectations, and we collect rent payments. We’re also the point of contact for tenant communications. Whether tenants have questions about repairs or getting a new roommate or wanting to paint their bedroom fuchsia, we take what can be the constant battering of phone calls and emails off the shoulders of owners. In many cases, our staff can handle tenant issues that arise without needing an owner’s input. But when we need to, we also communicate any larger issues with owners so that they can make the decisions that are right for their property.
Marketing & Sales
We find that marketing is one of the most unexpected ways that we can help owners make their properties more profitable. Many owners don’t advertise until an apartment opens up – and then they might only post on one rental site. We develop comprehensive marketing plans for all of our properties and then continue to manage the advertising budget for owners. Marketing is the difference between smooth transitions between tenants and apartments sitting open. Whenever an apartment is unoccupied, that means there is money that could be coming in – and it’s not. Multiple even a short tenant absence by a large portfolio of properties and the result can be a big impact on an owner’s bottom line.
Additionally, we make sure an owner’s sales process is running its best. We make sure that a property’s sales people are kept up to date with trainings on product knowledge, sales skills, and customer service, we create and keep tabs on a variety of referral programs, and we do community outreach to improve sales and down the road. We offer other services, like media tracking and employee incentive programs that can give a property a remarkable edge in the competitive rental marketplace.
When Kim in 5C has a problem with her heat, she calls the building maintenance staff. But what does Kim in 5C do when she has a problem with the maintenance staff? While property owners generally already have maintenance staff, we find that sometimes property owners don’t have the time or experience to investigate the effectiveness of their maintenance staff. Our century of experience means we know how to evaluate maintenance staff and are able to provide staffing recommendations.
Maintenance, it turns out, is one of the top three aspects of an apartment that causes current tenants to decide to either stay at or leave their current place. If your maintenance team is understaffed or needs to be more efficient, tenants’ requests can go unfulfilled in a timely manner. This can result in angered tenants and, in the worst-case scenario, tenants who withhold rent or begin legal processes. We keep close tabs on maintenance procedures to make sure they are running smoothly and efficiently.
Because we’ve been around quite a while and have a hearty portfolio of properties, we also offer owners many perks that smaller companies cannot. For instance, we have a bulk gas-purchasing program that allows our owners to access discounted gas prices. We also keep close tabs on utility consumption and make recommendations to owners about tweaks to the system, when necessary.
Furthermore, making security plans and upgrades, creating emergency and crisis plans, and even designing and implementing recycling programs – we are literal pros at this kind of stuff. These are measures that can improve and protect an owner’s investment, but often get pushed to the side for more immediately necessary details to be taken care of. But with our team of experts, we can manage it all.
Sure, we keep track of who has paid rent and when and who owes what. But that’s only the tip of the iceberg.
When a new property becomes ours to manage, we immediately complete a total property assessment, which includes conducting a market analysis. Owners need to set rent prices that are “just right.” Too high and you may end up having unrented apartments at peak times. Oftentimes, owners resort to dropping rent prices on unrented apartments once the busiest times of the year are over, which results in rents that are actually lower than what they could charge if they attracted tenants at the busier times of the year.
Conversely, rents that are below market value may result in filled apartments, but the owner might be damaging his bottom line. This can have negative ramifications that go far beyond not getting as much income as you can from a property. If an owner could be charging more for rent, they often don’t have the reserve cash on hand when something goes wrong, like when the roof springs a leak or a furnace needs to be replaced or other major improvements are needed. Those are things that must be done immediately, of course, but there are also items – like updating common areas – that can be put on the back burner, but can ultimately affect your ability to raise rents.
So, our comprehensive market analysis provides big benefits to owners. Setting the right price for your rentals is not only a complex process that takes time and industry know-how that many owners don’t have, it’s also crucial to a smoothly running rental property.
A management company’s first goal is to do their best to make sure the owner avoids any legal issues and the best way to avoid legal issues is to have an in-depth knowledge of the law. Realty & Mortgage’s long history in the Chicago apartment arena means we’ve seen it all. In fact, our Chairman Emeritus, Harold Rider, co-authored tenant-landlord legislation and the Chicago Real Estate Board “Form 15” Apartment Lease. We know real estate laws inside and out.
The first step in avoiding legal problems is having a thorough tenant screening system: we help our owners get better tenants who cause fewer problems, pay rent on time, and keep their apartments in good condition. We also make sure properties are providing safe living environments so we lessen the possibility of property-related legal issues.
But no matter how great a management company is, it’s unfortunately a matter of time for most owners before a legal problem arises with a tenant. Our long history means we’ve literally seen it all – and, therefore, we know how to handle it all. If as an owner you’re concerned about the cost of a management company, you’ll more than make up that money by avoiding just one lawsuit.
Why Tenants Want to Live in Management Company Properties
If you’re a tenant and not an owner, you may have skimmed through most of this post, but here’s the key section for both you and owners alike. Tenants rate their experiences in management company properties higher overall than their experiences in owner-managed apartments. Here are a few quick reason why, as a tenant, you should always consider who manages your apartment:
- Maintenance issues are taken care of more quickly and buildings are, in general, kept in better repair. It’s not that owners care less – that’s certainly not true. But they often just don’t have the time or bandwidth to deal with all the maintenance issues coming at them at the same time. Conversely, management company properties have dedicated staff to take care of minor or major maintenance issues, know the subcontractors to call when outside services are needed, and can make time to improve properties when owners sometimes can’t.
- Management company properties are often better managed financially. A good management company makes the financial side of property management more efficient. What does that mean for you as a tenant? It means more for your rent money, to start. From repairs to updates, properties that have tighter financial management have more money to invest in the property.
- Tenants get better neighbors. Management companies are able to do thorough application review and have more experience selecting tenants that are more responsible in paying rent and taking care of their apartment. That means neighbors who are less likely to be problematic for other tenants.
- Easier rent payments. Many management companies offer rent collection services that single owners can’t. No writing checks, buying stamps, and hoping your check arrives before the rent deadline. Online payments are easy, safe, and free.
These are just a few of the reasons tenants should look for management company properties when they are looking for a new apartment. And owners? This is all good for you too – you want to own the building where tenants love to live.
Whether you are looking for your next new home or you are curious about what our management services can do for your properties, we’d love to hear from you. If you’re interested in property management services, our Co-President Harold Rider is looking forward to hearing from you. He can be reached at 773-549-8300. If you’re looking to live in a great apartment, we’d love for you to check out our available listings online.