No two real estate investors are the same. Even if you invest in the same market and look at the same properties you and a fellow investor may differ on how to run your business. One area that is often debated is whether to work with a property manager. Most real estate investors recognize the importance of having a professional manage their rental properties. Where the debate starts is whether the return matches the monthly fees. Almost any investor can handle the tasks of a property manager. What they should give up getting this done is the tricky part. A property manager can quickly handle a task that would take you hours to finish. Not only that but they are often one step ahead of everything you need to complete with the property. If you are not sure if a property manager makes sense here are five benefits of working with a property manager.
- Total Property Management. A good property management company handles almost every aspect of a rental property. When most investors consider a property manager they think of them handling only one or two aspects of the property. A good property manager is experienced and knowledgeable enough to take care of everything from tenant screening to securing the best local plumber. They are on top of rent collection and can even offer advice if you need to evict a bad tenant. For a set monthly fee or a percentage of the rents received they should help put your mind at ease knowing you do not have to worry about anything with the property. Many investors appreciate the peace of mind this brings and are willing to pay whatever the monthly cost is.
- Free Time. There is a big difference with handling one lone rental property and trying to juggle six of them. As any investor can tell you with the wrong rental one property can be a handful. If you have three or four properties that constantly need your attention you don’t have much free time to focus on other aspects of your business. You will be forced to deal with small issues daily with one of your properties. The minute you think you are out of the woods something else pops up that requires your attention. A professional property manager takes care of all these minor items that can eat away at your day. You don’t have to worry about the constant tenant phone calls that take attention from the task at hand. With increased free time you can find more deals or focus on areas in your business that may be lacking. It is not hyperbole to say that you truly can’t put a price on the free time that a property manager creates.
- Tenant Generation. Most issues that pop up during a lease may be an inconvenience but are usually fairly cut and dry to deal with. If the furnace needs to be replaced there are only so many options. Where bigger issues arise are at the beginning and end of the lease. Everything starts with finding the right tenants. It is not enough to hand over the keys to the first tenant that shows interest in your rental property. Without good tenants, even the best landlords will struggle. What a property manager will do is make sure only the most qualified tenants are open for consideration. They will not only find tenants but take the necessary step of screening them to make sure they are exactly what you are looking for. Even if your property is in a high demand area finding tenants is not as easy as you may think. You still need to promote your property and generate as many interested tenants as possible. A property manager will take all the legwork out of finding and screening tenants and leave you to choose among only the best candidates that will ensure a timely monthly payment.
- Pricing. One of the misconceptions of property management is that they pay for any services needed during the lease. While they might pay for the services it is not included in their monthly fee. You are still on the hook for payment to the plumber, electrician, locksmith or anyone else that works on the property. Where a property manager is beneficial is in getting the best price for this work. Most managers have spent years in the business building contacts they can call whenever something needs to get done. These contacts can equal savings to you. Instead of calling the first plumber you your property manager has someone on speed dial that won’t take advantage of your situation. Saving a hundred dollars here and there may not seem like much but will equal real savings over time.
- Expense Transparency. It is important that you know where every dollar goes with your rental property. Even if you think you are on top of your expenses a property manager will dig a little deeper. They will provide a detailed outline of all your monthly expenses. For some landlords, this can be an eye-opening exercise. They may not realize they are paying so much for lawn care, cable or anything else associated with the property. The more you know about your expenses the easier it is to attack them.
There are certain expenses in business that may sting in the short term but make sense in the long run. Property management is one of these expenses. Even if you don’t think you need it you should always consider working with a property manager.
