Choosing whether or not to use property management companies is a hard decision for many real estate investors. Some would not dream of investing in real estate without a real property management firm in place before closing on a respective deal. Others, however, struggle to break free of the “do-it-yourself’ mindset that prevents them from accomplishing more. As it turns out, using a real property management company isn’t as obvious as we would have liked to assume.
You may ask yourself questions like “What does a property management company do?” or “Are property management companies worth it?”. It’s fair to say the argument stems from the cost one must absorb to work with a property manager but we digress. The cost is not so much a negative, but rather an investment. While it does cost money to hire a third-party manager, we can assure you it’s well worth the price.
What Is Property Management? Property management is the practice by which a third party is responsible for maintaining a residence’s status quo and appeasing its occupants. Therefore, property managers are traditionally hired by rental property owners to oversee the daily operations of their real estate assets and deal with any questions or concerns the tenants may have. A Property management company like RPM Choice can handle a variety of property types, ranging from single-family homes to condos to apartment complexes to office or retail spaces.
Do I Need A Property Management Firm? While property management companies have several advantages, they are so costly. Therefore, plan on hiring a property manager if:
You don’t want to actively manage the property. If you view the property as a source of passive income, you’ll need a property manager to take care of routine maintenance and daily operations.
You are not within proximity of your asset. If the rental property is far from where you live, it’s a good idea to hire a manager who can keep better tabs on it. You can afford the added cost. Property managers will charge a percentage of the rental fee, which is well worth it. The same fee can rid landlords of a lot of headaches and free up a lot of their time to invest in other places.
You plan on acquiring multiple rental properties. The more rental properties one has in a portfolio, the more necessary property management firms become.
You have a property in the affordable housing program. Usually, in programs like these, owners receive grants, tax credits, or loans with low-interest rates in return for renting to those with low-income levels. With these benefits also come more complicated rules you must adhere to. Having a property management company that is aware of the ins and outs of these rules can help exponentially in the long run.
Benefits Of Having A Property Management Company
The single greatest benefit investors are made privy to by working with property management companies is saving time. By enlisting the services of a good & real property management company, investors won’t be forced to manage the property themselves, instead they’ll be free to take on other much more important responsibilities.
The added time helps most investors find and acquire more rental properties to add to their portfolios. For others, not having to manage a property rids their lives of unnecessary stress. What’s worth noting is, that time isn’t the only reason someone may want to hire a property management company. There are actually several benefits to hiring a manager, which include:
1. Mitigate Liability: One of the little-understood perks of having a third-party
property management company is the buffer from liability a good property manager adds to an inexperienced investor’s portfolio. It can be easy for opportunistic tenants to make false accusations about rent collection tactics, illegal eviction practices, and negligent maintenance.
2. Quality Tenants: Property management companies manage properties for a
living. As a result, the best of them have grown to know what to look for in a good tenant. It is, thus, safe to assume hiring a property manager will result in better tenants for a property, which is great news for landlords. The better the tenant, the better the experience will be for clients.
3. Shorter Vacancies: Not only will a property management company
advertise to fill vacancies, but it will also do so with a sense of urgency and efficiency. They are most likely better at filling vacancies than traditional landlords, which drastically shortens the length of vacancies. Meanwhile, investors can increase profits throughout the year by keeping the asset in service.
4. Lower Maintenance Costs: Working with good property management firms
will give investors access to their network of professional contractors. The contacts the property manager already has in place will work in your favor and save on maintenance costs. Along with that, the contractors will also come with a recommendation, which is invaluable.
5. Better Reviews: Tenants tend to prefer working with property managers, as
the process is almost always objectively smoother. As a result, the experience is typically better than dealing directly with landlords. Subsequently, clients are more likely to leave a good review when they vacate the premises. Those same reviews will serve to drive more traffic to the home when the time comes to find another tenant.
It is entirely possible for a truly great property management company to save/make investors more money than their initial fees. That said, the cost of property management is more of an investment than an expense. If you’re looking to know more about us, contact us by clicking here RPM Choice!!
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