A Property Management company handles the day-to-day details of running a rental property. Their responsibilities include: advertising and showing your property, screening tenants, collecting rents, and bookkeeping. Property Managers also communicate with residents on your behalf, maintain your property, and take care of after hours and emergency calls. For a landlord, engaging a Property Manager or Property Management company can be a great option for many reasons. Here are 8 reasons as to why you should hire a professional to manage your investment property:
1. Your Time Is Valuable
One of the primary reasons to hire a Property Manager is to save time. Managing your properties is a job, and in the initial stages, you will need to carve out a substantial amount of time. You will be busy listing the property, answering calls from prospective tenants, conducting showings, screening applicants, and preparing all of the lease documents. Then, you’ll have to be available to your new tenants and answer their calls or emails whenever they reach out. These tenant communications can come at any time of the day or night- depending on the urgency of their request.
Maybe you aren’t interested in being that hands-on with the daily operations, maybe you already have enough on your plate right now and can’t take on more, or maybe you just have more important ventures you want to focus on. Regardless, having someone else manage your properties will help you free up your time and allow you to do other things that are more important to you.
2. Reduce Your Stress
Many landlords and property owners hate having to deal with the tedious tasks that often come with managing rental properties. Some of the less appealing aspects include: finding contractors, dealing with excuses about why a tenant cannot pay the rent, late night emergency maintenance calls, and other tenant dispute resolutions. Does any of this give you anxiety or raised blood pressure? Then hiring a Property Manager is definitely right for you! Your property management company will be the point of contact for your tenants. They will act as your agent, and will deal with any complaints and service requests from your tenant.
3. Maximize Your Income
Property Managers are typically paid a percentage of however much rent is actually collected for the landlord. This means that if rents are low, the property is sitting vacant, or the tenant isn’t paying their rent- the Property Manager’s pay is impacted as well. This is advantageous to landlords because you can expect your Property Manager to be just as motivated as you are to maximize the cash flow on your investment property. Your Property Management company will help you determine the optimal rental rate, depending on your goals and on current market conditions. All Property Managers should have access to market data and comps in the area, but a good Property Manager will also help you consider the importance of tenant retention for renewal offers, the cost of turnover, and can make recommendations for renovations and updates that will maximize the rental value for the area.
Acting as an agent for you, while handling the communication between the landlord and the tenant, also helps the Property Manager maintain the business-professional standard for operating your investment property. By removing the emotional aspects from the business transaction, you can rest assured that the Property Management company will have a high success rate in collecting those rents and tenant fees. They have your fiduciary interest in mind and will enforce the lease agreement consistently.
Finally- you can use the time you save by utilizing a Property Manager to scale your real estate investments and business. It allows you to focus on growing and scaling your portfolio, find deals, buy more properties and increase your earning potential. Maximize your income by continuing to grow and expand in this lucrative industry!
4. Reduced Vacancy & Turnover Cost
Starting with the initial advertisement and rental rate, your Property Manager will minimize your vacancy time and attract a quality tenant for you from the beginning. If you invest in property management, you will probably end up with shorter vacancies. Property Managers know how to market your property well, and have the software, internet presence, and marketing resources available to them to get your listing exposed in many places at once.
After that- Property Managers play a vital role in tenant retention and minimizing your turnover costs. The goal is to attract quality tenants, keep those residents happy and then renew their lease each year at an increased rate. A good property manager will take care of any problems or issues quickly when they come up, which in turn will cause your renters to be more happy and satisfied living in your property. When your tenants are happy, they are far less likely to move. The longer your tenants agree to stay, the more money you make. Besides saving you lost rent, you will save on cleaning costs, changing locks, an any minor repairs that you can’t deduct from a security deposit. It’s much easier to keep your tenants happy so they can stay longer.
5. More Legal Protection
If you invest in Property Management, you will be working with licensed Real Estate agents who are knowledgeable on local rules, regulations and laws for the area where the property is located. Additionally, landlords have access to the legal advice and protection of the Property Manager’s attorneys. All leases and required forms are either attorney- drafted or approved by the State’s Real Estate Commission. Property Managers will consult with an attorney as necessary when serving notices to residents or taking action for evictions. Your mind can be at ease knowing that everything is legally abiding, and that your Property Manager is ensuring all of the paperwork and communication is in compliance.
6. Better Tenants
Property Managers tend to sift out many of those problem tenants through their extensive screening process. Top Rated Property Managers will not only verify all of the information on a tenant application, but will also utilize secure software programs that allows them to quickly run credit checks, background & criminal checks, and income verifications. An experience property management company has dealt with tons of rental applications and knows how to quickly analyze the information and spot red flags. As an owner, you will also be protecting yourself from any discrimination lawsuits due to inconsistent screening process. With most property management companies, the screening process is the same for everyone.
Hiring a Property Manager can protect the value of your asset through regular property maintenance and quick response times. Some important maintenance items your property management company may handle for you can include: landscaping, lawn care, snow removal, HVAC servicing, gutter cleaning, and regular inspections. Property Managers work with a number of technicians, vendors and contractors that should have a track record of doing a great job at a reasonable price. Property Managers will coordinate and schedule cleaning, repairs and maintenance at your rental property for you, and should contract the services of the professional you are most comfortable with them using.
8. Keep Everything Organized
Most Property Management companies will keep track of your accounting, bookkeeping, and important documentation. They not only monitor all of your income and expenses- but keep a record of your new appliance warranties, receipts, legal documents, etc. In the event that you hire a Property Manager, they should keep all of this information organized for you, which makes it much easier during tax season. Progressive Property Group sends our Colorado rental property owners a detailed financial statement every month, outlining all of the income and expenses for each investment property. We also send one to our clients at the end of the year with their 1099 so that they can file taxes easily.