If you’re a property owner, you already know how managing a rental property can be financially rewarding, but you also know it requires significant commitments. Personally managing your rental property may initially seem like saving money, but it’s not that simple. A hands-on, “do it yourself” approach is suitable for handy people, but… Do you live close to your property/properties? Do you have hours and hours to spend on property management tasks?
Managing everything alone isn’t too practical, especially when you’re striving to expand your business and manage multiple tenants’ buildings effectively. While it comes at a certain cost, if you decide to hire a professional property manager, it can spare you a lot of headaches and save you a ton of time. An experienced property manager is a worthwhile investment, and in this article, we’ll discuss why and how in detail.
1.) You'll have better tenants
A professional property manager can give you guidance about who your tenant target group is. Potential tenants will be thoroughly screened, and that will provide you with peace of mind knowing that you’ve secured perfect tenants who pay their rent on time and look after your property with care. The property manager takes care of all details in the security check of your potential tenants – they run credit reports, criminal background checks, verify their employment, and collect previous landlord references. They also collect proof of income from the tenant’s employer, personal references, credit history, public records, etc. Good tenants stay longer at your property, so they save you money in the long run.
A good property manager conducts a thorough market study to set the right rental price for your property. By doing so, they are ensuring that you are achieving the perfect balance between maintaining a low vacancy rate and maximizing monthly income. Securing payment on time can be difficult and awkward. Property management companies already have effective systems to collect rent successfully and on-time each month. Collecting payments on time is crucial for maintaining your cash flow.
2.) Avoid stress
When a professional is taking care of all the paperwork, you can deal with less costly and less time-consuming legal matters. A professional property manager’s job is always to keep you informed and give you accurate information relevant to your property.
If there is a need to rent storage, it’s also the property manager’s job to keep your unit safe for all the items and take good care of storage maintenance. Many things belong in storage – tools, heavy equipment, spare pieces of furniture, paint, materials needed for repairs, etc. When a tenant leaves their stuff behind, that’s one more situation when there is a need for storage space. Items in storage need to be looked after, not forgotten, so the property manager takes care of that – among all other things.
3.) Shorter vacancy time thanks to good marketing
A good property manager should conduct the lease renewal process three months prior to the tenant’s lease end date and ensure a quicker turnaround time. The property should also be marketed well with professional photos, a prominent signboard, and a premiere listing. An experienced property manager has a good knowledge of real estate markets and trends. They know exactly where to market your property, as well as how to craft compelling marketing materials so that your property has maximum online exposure. Do you know who’s in charge of effective communication with your tenants? Yes, that’s right, a property manager. They must be honest, open to communication, respond quickly to tenant’s requests, and keep their promises. Who’s going to be showing your property to new potential tenants? Again, the property manager. Scheduling and doing tours, answering questions, etc. They’ll have many tasks to complete as a part of their job.
In addition to all already mentioned, property managers must be polite and have good manners. They might need to assist all tenants on their moving day and every day after. They’ll need to address all their concerns, offer help, and provide guidance whenever needed.
4.) Dealing with maintenance and inspections
All maintenance on the property is the responsibility of a professional property manager. They must ensure that all the appliances and other items on your property are well maintained and serviced on time. Items must be repaired on short notice in case of malfunction, so it means the property manager must handle both routine and emergency maintenance. They also need to manage any insurance claims on your behalf and manage any situation which requires conflict resolution. Also, they handle regular inspections. Property management companies have business relationships with:
- Maintenance workers
The property manager needs to oversee any maintenance project or inspection happening on your property.
5.) Paperwork and compliance with the laws
The property manager is required to pay all the bills related to your property. They must also ensure that you comply with housing regulations and property laws. The property manager will also handle any possible disputes with tenants. Some property management companies have an attorney on retainer who can answer all the questions for you and your renters. The property manager also keeps complete and accurate financial records of your property, provides you with monthly statements (showing income and expenses), an annual accounting of the property, etc. You can trust that a capable property manager will have protocols in place ensuring that all the necessary local, state and federal paperwork is completed and filed on time.
6.) Maximizing the profitability
If you decide to hire a property manager to take care of day to day aspects of running your property, you’ll be free to spend your time identifying profitable investment opportunities and furthering your career. Most property managers charge a percent of your property’s monthly rental rate as a wage for their services. The rate is usually between 6-10%, and that is probably a lot less than the money you save by hiring them to take care of your property.
Owning a rental property is very rewarding, especially when you take steps to maximize your profit. On the other hand, taking care of a rental property is not exactly a piece of cake. Landlords live a busy life, and their time is their biggest asset. When you hire a professional property manager, it will mean leaving all the time-consuming matters to an expert while focusing your time on the continuous expansion of your investment portfolios.