Investment property owners who have owned their property for any length of time understand that managing a rental can be financially rewarding. At the same time however, they’ve probably also discovered that property management requires a lot of time and a lot of effort to do effectively. But a property manager can help.
The do-it-yourself approach can sometimes make sense on paper—especially for those who are handy, live close to their properties, and don’t mind spending hours every month dealing with the job—in many cases though it’s just not practical. This becomes especially true if a rental property owner wants to expand their business.
With this in mind, here are some critical tasks a property manager can help with:
- Setting the right rental rates: A good property management company will have the tools and experience necessary in order to set the best rental price for a property. This will help ensure that an owner achieves the perfect balance between maximizing monthly income and maintaining a low vacancy rate.
- Collecting and depositing monthly rent payments on time: Securing payment from clients can be difficult and awkward. Property management companies have efficient and tested systems in place to collect rent and deal with late payments. By collecting payments on time investment owners are more able to maintain cash flow, which is especially important for those with a small investment property portfolio.
- Marketing and advertising the property: Experienced property managers will know exactly where and how to market a property effectively. This will help avoid long vacancies.
- Finding the right tenants: Professional property managers are excellent at finding good tenants. They will also take care of handling all criminal background and security checks, running credit reports, verifying employment, and collecting previous landlord references.
- Managing tenants: Being a landlord is more than just finding good tenants and collecting rent. A property management company can manage all aspects of the tenant-landlord relationship. Property managers handle routine and emergency maintenance, take care of inspections, and basically manage any situations where conflict resolution is required.
- Managing vendor relationships: One of the best things about using a property management company is that management companies already have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors in place. Property managers can get owners the best work for the best price, and also oversee any necessary repair work.
- Ensuring that owners are in compliance with housing regulations and property laws: There is a multitude of applicable laws and regulations to abide by when renting and maintaining a rental property. These include local, state and federal regulations, as well as fair housing regulations (such as the ADA). A property manager can also help owners avoid lawsuits by keeping the property in compliance with legal regulations.
- Enabling owners to invest in geographically distant properties: Owners who manage their own property are typically limited to investment opportunities near home. By hiring a property manager, an owner can take advantage of investment deals in any location.
- Maximizing the profitability of an owner’s time: Investment property owners can use property managers to free up time, enabling them to identify other investment opportunities rather than using all their time to keep one property in the black.
- Maximizing the profitability of an owner’s money: Most property managers charge a percentage of a property’s monthly rental rate in exchange for their services. The rate typically runs anywhere from 6-8%. This amount is usually less than the money saved by hiring a property manager to handle the property.
