There are so many different facets to property management that juggling them all can become overwhelming. One of the most difficult aspects of managing rentals is the financial responsibilities it includes. As a property manager, you will need to collect rent and overdue payments, deal with security deposits and application fees, write checks, hire contractors, and keep track of all the finances.
In most cases it’s best to hire a property manager with experience. In order to lawfully handle the financial aspects of property rentals, you must have a Texas real estate broker’s license. This allows you to be responsible for the following:
- Deciding on accurate rental rates for all units- you must have knowledge of the real estate in and near Houston. You’ll need to conduct research and draw up comparison rentals in the area to accurately set a rental rate for the units you manage.
- Changing rental rates and adjusting fees whenever necessary- you need to keep up with the real estate industry and the current market trends for the Greater Houston area.
- Hiring contractors. Ex: landscapers, maintenance, handymen, plumbers, etc. – finding the most reliable and professional local contractors at the best rates is necessary as a property manager. You’ll need to form relationships with various contractors.
- Collecting rent and other fees- gathering rent from tenants and other fees is essential. Fortunately, there are various types of property management software that you can use to make rent collection easier nowadays.
- Security deposits- there are state laws regarding security deposit collection and disbursement. Security deposits are an important tool in protecting your property. If damage occurs or tenants leave early, you can keep the deposit initially paid during the lease signing.
- Taxes- you’ll need to deal with IRS-1099 forms and tax deductions along with yearly tax records.
- Handling and recording all incoming and outgoing money- you’ll need an effective method of tracking all incoming and outgoing money.
- Dealing with reports including monthly and yearly statements- you must have the ability to pull up accurate reports whenever necessary. Online software is usually the best way to keep record and manage statements.
- Make payments for property owner- this isn’t always the responsibility of the property manager. Sometimes the owner chooses to keep this as their own responsibility. However, you may be asked to mail checks and pay bills such as the mortgage, insurance and property taxes among other financial responsibilities.
As you can see, the financial responsibilities as a property manager are a lot to deal with all on their own. Managing all other aspects of rentals at the same time is much too difficult for an inexperienced individual.