Every once in a while, prospective tenants ask us a loaded question: “Is this rental property privately-owned?”.
They’re not asking if the property is owned by the government or a for-profit organization; they’re asking whether the property owner manages it themselves or hires a professional management company (like us) to handle it for them.
Tenants make a lot of assumptions about these two property management structures. Some tenants prefer to live in owner-managed properties, while some prefer to rent professionally-managed properties; sometimes, their preferences are based on these assumptions.
Here are four examples of the differences that tenants may believe exist between the two management styles:
How quickly maintenance issues are addressed
Tenants might prefer to rent from individual property managers, thinking that property management companies take longer to address maintenance issues because they’re overloaded with a long queue of requests.
While it’s true that property management companies typically service anywhere from hundreds to thousands of units at a time, this doesn’t mean maintenance requests are addressed slower than they are by individual property managers.
Individual property owners might be tempted to handle every maintenance request by themselves, creating a huge backlog and prolonging the time it takes to address all outstanding maintenance issues. On the other hand, a property management company is more likely to have dedicated maintenance personnel on staff, who are able to address maintenance issues promptly no matter how many units the company is managing.
How lenient screening requirements are
There is a perception amongst renters that individual property managers tend to be less strict when it comes to their screening requirements.
Neither individual property managers nor property management companies should be lenient on rental screening requirements, because this increases the financial risk for owners. The only time that this may be the case is when an individual property owner doesn’t yet realize that they are assuming a risk when they are too permissive while screening prospective tenants.
No matter what the management structure is, the fiduciary duty to the property still remains.
How strictly lease agreements are enforced
Property management companies, by nature, have well-established processes in place to enforce the terms of the lease agreement. Because of this, they are generally better-equipped to enforce the lease agreement than individual property owners.
Tenants who own pets (or hope to own pets) usually favor individual property owners, in hopes that the owners won’t make a big deal out of unauthorized pets.
How security deposit protocols are handled
The handling of the security deposit is a point of contention between tenants and management, no matter what the property management structure is. One benefit to working with a property management company is that they’re less likely to withhold a deposit when they’re not legally allowed to do so, as they typically know the local tenancy laws backwards and forwards.
So, tenants: Don’t ask, “Is this property privately-owned?”, as the majority of the rental property in the US is privately-owned. Instead, ask the better question, “Is this property professionally-managed or individually-managed?”.
And landlords: When interviewing prospective tenants, you’ll want to keep in mind the factors described above, as they’re likely already on your potential tenants’ minds.