One of the most important decisions you will make when you start investing in real estate is whether or not to hire a property management company.
Many investors looking to rent out a unit will have to decide whether to manage the property on their own or with the help of a company such as a property manager. However, if you need more help, hiring a rental company is ideal.
Real estate management companies can play a huge role in easing the burden and making your life a lot easier to manage and focus on other parts of the business. But what does a property management company do?
What does a property management company do?
Property management is vital to the maintenance of the property. The property manager is responsible for keeping the property in top condition.
This includes dealing directly with interested parties and tenants, assisting with the collection of rent payments, handling all repairs and maintenance, providing on-call support and even tracking evictions.
The manager will also be involved in making critical decisions about the property. Hence, careful scrutiny should be done to ensure that the best company has been hired.
Additionally, property management services are treated as independent contractors so you are not an employer.
When should you hire a property management company?
Hiring a property management company comes with a long list of benefits, but using one can hurt your profits.
Eventually, that money can be used to pay off the mortgage on the investment property.
So when is it worth hiring a property manager?
For me, I would only consider hiring property managers, though at least 2 statements Refer to your situation below:
- I have more than one rental unit that I currently manage myself.
- I don’t live near my rental property.
- I have neither the time nor the desire to manage these properties myself.
- I can pay a property manager 5% and 10% of my monthly rent.
Benefits of using a property management company
A property manager brings a lot of value to your investment. A manager can bring high quality tenants into the property.
This ensures that the rent is paid on time and the building is less worn out, which in the long run reduces repair costs.
The manager conducts tenant audits, carries out evictions, makes important repair decisions, helps with taxation and ensures tenant loyalty.
How to hire a property management company
They: Should I hire a property management company?
Me: Yes, and this is how it works …
Take the fees into account
The property management company provides essential services, but the fees must be fair.
The fees should correspond to the market fees and also be associated with the services offered. Most reputable property management companies offer:
- Marketing your property across all important channels
- Screening applicants to find the best tenants for you
- Drafting and implementation of airtight rental agreements
- Coordination of move-out and move-in logistics
- Maintain good relationships with your tenants
- Processing of maintenance requests around the clock
- Management of renewal and monthly negotiations
- Deposit and listing of the deposit
- Ensure full compliance with all local laws
- Licensing your property as a legal rental
- Collect rent and deposit it into your account
- Prepare financial reports with incredible detail
For many services they should charge more than for a few services.
However, this does not mean that the company that charges the least is the best.
Think about how the funds will handle
Most property managers have to deal with the money that tenants pay for rent, after all, they will not be living rent-free.
A good property manager can handle the funds well on behalf of the owner.
In addition to collecting rent, you should collect security deposits, reserve funds, and taxes.
You should also mail the owner a check on a specific day of the month.
Maintenance and repairs
Another service that the company should offer is the maintenance and repair of the building to keep it in prime condition.
Many property management companies can tell if they offer these services by checking their websites as a feature they offer.
Real estate management companies often provide a portfolio that shows and explains all of the tasks and responsibilities they offer.
Finally, you should make sure that your investment properties are kept up to date in case you later want to flip them for a profit.
The inspection involves checking the property for defects and problems and helping the manager understand what repairs are needed and how long they might take.
Inspections help prevent bad tenant behavior and identify problems early enough that they are incomplete and cost more repairs or cause major inconvenience to tenants.
The property manager should offer regular inspections both inside and outside the home.
Marketing and tenant loyalty
The property management company should also be able to do a lot of online and otherwise marketing for the property so that tenants always know whenever a home is vacant.
It is not enough to attract the right tenants, as customer loyalty is also very important.
The property manager should ensure that the tenants stay for the entire rental period.
Collection of rent
The management company should determine the rent based on current market prices.
You should also collect the rent from the tenants and send the check to the landlord on time. Late payments should be treated with dignity so that tenants do not feel annoyed if they do not pay on time.
With these and other considerations, you will get a good property management company.
How to Find a Good Property Management Company
When choosing a property management company, make sure you choose a reputable one. You can get referrals from real estate investors in your area by using real estate apps and consulting your local network of housing associations.
You can also search professional directories on the Internet and search the Institute of Real Estate Management membership directory for certified property managers.
You’ll also want to see if the property manager has positive reviews for Yelp, BBB, or TrustPilot, depending on how big the company is. Make sure you have your interview questions ready to hand over to your property manager’s duties.
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