We’re happy to talk this through with you as experienced property managers. If you would like further information and support, contact us at Onyx Property Management, where we serve owners and investors in the entire county, including in San Diego, Chula Vista, Oceanside, Carlsbad, and the surrounding areas.
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Do I Need an On-site Manager? San Diego Property Management Expert Answers
Onyx Property Management • November 5, 2021
If you own a multi-family property or you’re thinking about investing in this type of residential real estate, you need to understand California law and how it differs in regards to larger buildings.
Many owners and investors ask us if an on-site manager is required when renting out units in a multi-family building. We’re going to try to clear up some of the confusion around this topic in today’s blog.
On-Site Management Requirements
California law requires that every apartment building with 16 units or more must have an on-site property manager. This means that your
San Diego property manager must live in one of the residential units in the building.
Buildings with fewer than 16 units do not have this requirement, although sometimes a property owner will want to hire an on-site manager or maintenance expert to keep an eye on things and respond to any repair needs that might come up.
On-Site Managers are Employees
California law requires that the property manager on-site be an employee. You can contract this work out or ask a friend to move in as the on-site manager without any compensation.
Because your on-site property manager is an employee, you are legally required to provide workers compensation insurance. You also have to withhold all required federal and state income taxes from their salary and contribute to social security.
On-Site Manager Duties and Compensation
The on-site property manager will take care of the day-to-day operations of the building, the individual units, and needs of the tenants who live there. These responsibilities may include:
- Rent collection
- Showings and tours
- Tenant screening
- Serving notices when rent is late
- Responding to questions from tenants
- Overseeing maintenance
- Providing reports to property owners
Sometimes, an on-site property manager will provide these services in exchange for a reduction of rent since they live in the building. If, as a condition of employment, the on-site property manager must live at the place of employment or occupy quarters owned or under the control of the property owner, then that property owner is not allowed to charge rent in excess of the values set forth under California law.
Pros and Cons of On-Site Management
If your investment property has 16 units or more, you know that you are required to hire an on-site manager for the property. However, if you’re not legally required to hire an on-site manager, is it something you should consider?
This will largely depend on the property itself, the tenants you have, and whether or not you’re working with a full-service San Diego property management company already. If you’re renting out six apartments in a smaller building and you’re already working with a reliable property manager, you probably won’t need an on-site person responding to maintenance and tenant issues. It would only take up one of your available rental units. However, if you have a 14 or 15-unit building and it can become unruly for you, having someone on-site might bring peace of mind.
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