What are The Benefits of Using a Property Management Company?
A competent property manager can add significant value to your investment. Here are a few ways that a good property manager can add value:
Increase the value of your investment
Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance.
Lower maintenance and repair costs
Good maintenance and repairs keep tenants happy and preserve the value of your investment which makes them a very important part of land-lording. By hiring a management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. Not only is the company able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.
Personal benefits for owners
- Less stress - Avoid having to deal with middle of the night emergencies, chasing down rent, evicting people from your property, tenants who wreck your property and mountains of paperwork.
- More freedom of movement - Live and invest wherever you want with the constraint of needing to be near your properties. Additionally you can live and travel without the requirement of always being available in the event that your tenants have a need you have to tend to.
- Free up more of your time - Time is money, and for many investors, their time can be more profitably spent in areas other than servicing their properties.
Tighter rent collection process
The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.
Regarding evictions, there are strict laws concerning the eviction process. A good property management company knows the law and has a good process for obtaining the best possible outcome given the circumstances.
Fewer costly and time consuming legal problems
Veteran landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Avoiding a single law suit can more than pay for the property management fees, and spare you time and anguish.
Shorter vacancy cycles
A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:
- Improve and prepare the property for rent
- Determine the best rent rate
- Effectively market your property
Better tenant retention
While it’s easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing , screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for. A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties.
Higher Quality Tenants
A thorough screening process results in reliable tenants that:
- Pay on time
- Rent longer
- Put less wear and tear on the unit
- Generally cause less problems
An experienced property management company knows how to quickly dig for the real facts about candidates and analyze that information for warning signs. By allowing a management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process.