A professional property manager can possibly fill the gap... but it is not easy for hands-on owners to give up control especially if there is a concern about the manager's experience, diligence, and attention to property and tenant needs. For many of these owners, their rental income may be a substantial portion of their income. Will turning control over to someone else place them in financial jeopardy?
Here are some of the key factors to look at in choosing a property manager:
1. Licensed - In California, all property managers are required to be licensed by the Bureau of Real Estate. They must either hold a Broker's license or must be working under a licensed Broker.
2. Training - All real estate licensees are required to undergo training in real estate subjects - including property management - as a precondition for licensing. Advanced training and certification programs are available. Perhaps the best known designation is Certified Property Manager ("CPM") which is awarded to those who complete the rigorous experience and training requirements of the Institute of Real Estate Management ("IREM"). In addition, the California Association of Realtors has a Property Management Certification ("PMC") with 7 courses leading to the PMC designation.
3. Experience - The CPM designation requires that the candidate has at least 3 years of experience as a property manager in addition to the required training. No experience is required for the PMC designation. Under California law, there is no legal requirement that a property manager be either specifically trained or experienced. In Nevada, however, where I am also licensed, there is a separate designation and testing for property managers; regular realtors can not perform property management duties without this designation.
4. Affiliations - Most property managers will be members of their local Board of Realtors and be a member of local and national property management organizations. Perhaps the best known of these is the National Association of Rental Property Managers ("NARPM") which has a very active Chapter in Sacramento. There are 136 Members in the Chapter where I have served in many capacities including the 2016 President.
Regardless of how you find a property manager, the individual and company must be prepared to demonstrate their training and experience in these key responsibilities:
1. Collect the rent timely
2. Take the calls from the tenant, be responsive, keep a record of calls
3. Arrange for repairs - do they have maintenance on staff refer to contractors
4. See that the repairs are done properly.
5. Send appropriate notices to the tenant for late or nonpayment of rent, violations of the rules, etc. Do or oversee evictions.
6. Get your approval for major expenses.
7. Inspect the property occasionally
8. Provide you with an accounting of all money received and disbursed monthly or quarterly, as well as keep a client trust account for owner money. State law regulates property managers much as it does real estate agents. And every state is different.
And whatever else you agree upon between you. In fact every responsibility of the property manager is agreed upon contractually.
A PROPERTY MANAGER OWES YOU A FIDUCIARY DUTY
A property manager is given substantial control over a valuable financial asset. Under California law, the manager owes you a "fiduciary duty" which is the highest duty of care. They must put your financial interests ahead of their own and the actions they undertake in your behalf must be in your best interests.