Is a management company right for your rental property
What Does a Property Management Company Do?
You may have noticed that along with property investment, property owners are handing the reins of managing their property to property management companies. This usually happens when the owner lives far from his rental unit. He may also have several rental properties to manage due to a growing real estate portfolio. Other reasons would be he has a full-time job and considers it wiser to have a professional team looking after his property asset. In this case, the property owners opt to earn passive income while leaving the heavy-duty responsibilities to property management experts.
Duties of a Property Management Company
Considering the management fee you pay every month to a property manager, they are responsible for a variety of tasks that helps a property owner earn more from his rental property while reducing his stresses.
Rent Management
The property manager will conduct rent analysis and do a comparative study in regards to optimal rent price given the market demand. He will tweak the rate and adjust if it’s too low or too high. He’s also responsible for the prompt and full rental collection, a common thorn for a self-managing landlord.
Tenant Management
The property manager will act as your professional representative and deal with tenant issues. He will mediate during conflicts and communicate with tenants when it comes to strict enforcement of leasing conditions. He will also attend to property requests, disseminate information, and provide feedback for tenant inquiries.
Property Management
The property manager ensures that your property remains attractive market-wise. He will inspect problem-prone areas and check the exterior of the unit. This is to continue building value whether you plan to attract more tenants or sell your property. He will also promptly address urgent cases such as a tenant losing his key or one who’s suffering from a water leak in the rental unit. If there are major repairs to be attended or a team of specialists is needed, he will coordinate with his network of trusted contractors.
Bookkeeping Management
Every great business needs an organized accounting system. Normally, property managers offer this service and it’s a massive help to property owners who need to review accurate figures. As an investor, you want to know how your rental business is faring and check your operational expenses. At the same time, efficient bookkeeping is needed to ensure you’re paying the right amount of taxes for your property. The property manager provides an easy and accessible system so you can track your cash flow and evaluate whether you can fund another investment.
Marketing Management
The property managers will focus on reducing your vacancies and proactively work to promote and advertise your unoccupied unit. They will use tried-and-tested marketing strategies. They’ll take the time to analyze the proper marketing vehicle that will drive plenty of prospective tenants to your property.
They may also turn towards their network and agents using word-of-mouth to draw more applicants to your property. It’s not easy to have an investment that doesn’t earn you income. That’s why a property manager will put every effort to find tenants for your property.
Benefits of Hiring a Property Management Company
The most obvious reason to hire a property management company is to gain more control of your time. Another would be to eliminate the stresses of constantly attending to your property and tenants. Apart from these two sensible reasons, here are other benefits you can enjoy when you hire a property manager:
Legal Protection
There are inherent risks when running a rental property such as serious violations committed in your property and malicious accusations. Having a property manager on your side guarantees that your rental business is carried out in compliance with the law. Additionally, property managers are fully cognizant of Landlord-Tenant Laws, Fair Housing Act, Eviction Laws, Security Deposit Laws and several more making them a reliable team to have on your side should situations turn complicated.
High-Quality Tenants
Finding quality tenants can be attributed to luck and skills. Since we can’t control the former factor, we can focus on the latter. Property managers have sharpened their skills from their years of working in the property management industry. They know what vital information to examine and what reports to cross-check. They can also evaluate potential problems based on solid experience. Hiring them would lead to well-selected renters that will ensure you’ll reach your financial goals.
Low Turnovers, Reduced Vacancies
A self-managing landlord can spend a long time finding good tenants compared to property managers. As experienced professionals, property managers are quicker and more efficient with their resources in marketing and attracting prospective tenants. Thus, you’ll enjoy reduced property vacancies. Moreover, they also know how to screen tenants properly so turnovers will be lower. The benefit would be consistent income for the property owner.
Savings in Property Maintenance
Property management companies normally have a ready support team or partnership with a group of licensed contractors. This means repair jobs are performed with high standards. They also have corresponding relationships with vendors that offer them discounts. This is an advantage to the property owner since the savings are passed on to them. As a self-managing landlord, it’s more costly to hire contractors on a per-need basis. This is also time-consuming.
Organized Financial Recordkeeping
Some self-managing landlords can prioritize recordkeeping last as they can be busy juggling urgent tenant and property matters. However, this is an essential part of operating a business. Hiring a property manager will make your financial recordkeeping more systematic and methodical. The benefit is a more detailed documentation making it easier to track down your investment’s financial growth.
Bottom line
It’s a common concern for property owners to weigh the costs and the benefits of hiring a property management company. However, there are several advantages that pay off in the long run. You can find reputable property management firms at reasonable costs that will look out for your best interests.
