Once you have invested in a rental property, the responsibility of maintaining and running the property can quickly become overwhelming. For many Owners, the logical solution is to hire a Property Management company to oversee their rental property. But is this the right decision for you? Here are the top 10 reasons to consider why you should hire a property management company and how the benefits far outweigh the costs.
1) Rent Collection: A professional property management company have systems and strategies to improve rent collection and on-time rent payments. This allows you to ensure swift and consistent rent collection.
2) Local Knowledge of Rental Rates: Property Managers have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow.
3) Tenant Screening: A Property Manager requires a detailed written application from each adult with photo identification. Additionally, property managers will run criminal, social security and public notice (bankruptcy or judgments) searches to determine if the application is accurate. Property Managers will also call past and present employers, landlords and other references. Property managers have set requirements and standards for accepting or declining an applicant and thereby ensuring you comply with fair housing rules and other local and state regulations.
4) Marketing Expertise: Property Manger's have years of experience in how to best market your properties so they are rented in the quickest time possible. PM's use both offline and online marketing to maximize your properties' exposure and find qualified tenants quicker. Most Property Managers utilize 10, 20 or even 30 different techniques to rent a property quickly which reduces your carrying cost of a vacant property.
5) Property Law and Regulations: Property Manger's have extensive and up-to-date knowledge of property laws and regulations and will assist you in making sure you are in compliance with your local, state and federal rules and regulations. These rules and regulations include complying with fair housing regulations, the Americans with Disabilities Act and other applicable local, state and federal laws. Avoiding one law suit will more than pay for any PM's fees many times over.
6) Tested and Reliable Professionals: Residential property management companies will already have vetted numerous vendors, suppliers and contractors to make sure they provided good quality work at reasonable prices. Failure to properly vet these professionals can be a costly mistake. Many owners overlook this function because they do not know how to do it or because it is a time consuming and laborious process.
7) Inspection Reports: Property Mangers perform property inspections before, during and after a tenancy. Additionally, most PM's will perform routine property inspections at least every 180 days. Your PM should be responsible for preparing frequent written inspection reports for each of your properties. Faults in your property that are found quickly can be resolved before they become expensive items of disrepair.
8) Financial Records: Property Mangers will provide detailed income and expenses reports as well as cash statements every month saving you the bookkeeping headache.
9) Emergency Calls and Shield You from Tenants: A property management company will shield you from emergency maintenance calls and tenant headaches. Imagine never having to deal with late night plumbing calls.
10) Low Costs: Most Property managers charge around 6% to 10% of the monthly rent collected. Assuming a monthly rental rate of $1200 per month that is a fee of $72 to $120 per month. Having a management company will only cost a few dollars a day.