13 Reasons to Hire a Property Manager
Have you just purchased your first income property? Congratulations! Owning an investment property can be financially rewarding. At the same time, property management requires a lot of time and effort. It can be overwhelming especially if you are not handy and if you don’t have a network of suppliers to assist you with managing your property. Should you hire a property manager?
You can adopt a do-it-yourself approach when it comes to property management as it will certainly help you gain valuable experience for managing your next properties. Having said that, devoting your time to property management will prevent you from spending your limited time expanding your investment portfolio, focus on your more critical tasks to grow your business, work on a specific skill, spend time with your family, etc.
Here are the 13 reasons why you need to hire a property manager.
- Rental Market Knowledge
Experienced property managers will have tremendous knowledge about the local rental market. They manage a lot of properties in the area and they have been in business for a while. They will have the adequate tools to be able to determine the right rental price. Setting up the right rental price is a very important factor to get started your journey as an investor on the right foot.
A good property management company will conduct a very thorough market study in order to set the right rental amount to maximize your monthly income while maintaining a low vacancy rate.
They also know the neighborhoods very well. They can inform you of the pros and cons of all of them, the sales, and rental prices for different areas in the market that you would like to invest in the future. They can provide you with detailed information about vacancy rates, average rental values, and the optimal property types that will attract the ideal tenant profile.
Hire a property manager and you can take advantage of the vast knowledge in terms of promoting and marketing your property. They will know where to advertise your property, which websites to post on. They will have a great pool of leads to be able to source the best tenants from.
- Rental Law Knowledge
There is a large number of critical laws and regulations to abide by when renting and maintaining your rental property. Good property management companies are familiar with the local laws regulating the tenant/landlord relationship.
A property manager can assist you with the legal aspect of managing your property and help you avoid lawsuits by maintaining your property in compliance with these regulations. The property management company can also assist you with the eviction process if you are dealing with a bad tenant who does not pay the rent or damage your property. What this means, less headache on your part!
- Finding Ideal Tenants
Property managers will have a proven system in place to avoid bad tenants. Unfortunately, there are a good number of nightmare tenants in all rental markets. Experienced property managers are familiar with all the signs of bad tenants. Read more.
They will manage the screening process that includes detailed application forms, credit and criminal background checks, reference and employment checks, and interviews in order to find the right tenant.
- Managing Tenants Professionally
When using a property management company, a property owner is able to keep a professional distance from their tenants. Getting too personally involved can result in being too lenient on certain issues or too defensive about certain types of complaints. Renting out a property is a business and it is much easier for a property manager to keep things on a strictly professional level. When issues arise, a professional property manager is better prepared to deal with the problem effectively.
Responding to tenant requests is one of the most time-consuming parts of owning a rental property. Tenants can be demanding, and some expect a lot of their landlords. But it is essential that you keep them happy if you want them to stick around and provide positive word of mouth. Don’t forget that the tenants are your clients who pay off your mortgage grow your business.
A property management firm can take care of resident requests to help ensure customer satisfaction. The property manager will handle both routine and emergency maintenance, take care of routine inspections, and manage any situations where conflict resolution is required.
Property managers are skilled in handling landlord-tenant conflict. They have a thorough understanding of the landlord-tenant law and can serve as the middle-man, or buffer, for problems. In addition, if the tenant knows they are dealing with a third party, they may act more professional as well.
- Payments on Time
Imagine having to run after your tenants every month to make sure you get your rights! This process is not easy and can be quite annoying. If you hire a property manager, they will assure you will have that rent directly deposited to your account on the first of each month, with no worries. They have had experience with a lot of tenants and have a follow-up communication system with tenants so landlords receive rents on time.
You will find this particularly important if you have a limited number of properties, and collecting payments on time is crucial to maintaining your cash flow.
- Maintenance and Inspections
Maintenance and inspections will all be organized by your property manager. They will be the first point of contact for your tenants if anything goes wrong. Then they can inspect and organize repairs. Often property managers have good relationships with vendors and suppliers potentially giving you a discount on their services.
A property manager will also arrange and conduct regular inspections, providing you with an opportunity to identify smaller problems at an early stage. This will help you avoid any large expenses in the future if the repairs are completed before they become bigger issues.
- Supplier Network
Property management companies have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors which is almost impossible for an independent landlord to duplicate. Not only will your property manager get you the best work for the best price, but they will also oversee any necessary maintenance projects and endure the repairs are done properly and according to the codes.
- Maximize ROI
As the property managers manage hundreds and thousands of properties, they will get better prices from suppliers and their expertise in terms of maintenance and repairs will save you a lot of money down the road.
Experienced property managers will also introduce you better mortgage and insurance brokers which will again save you time and money!
- Retaining Good Tenants
Retaining great and profitable tenants year after year is every owner’s dream! Imagine not having to deal with new tenants every year? Professional and knowledgeable property managers will know how to firstly, attract the right tenants, and secondly and most importantly how to keep them. By creating and maintaining a good relationship with tenants, you will make sure that they will stay longer.
- Paperwork and Bills
Ensuring all paperwork is completed correctly can be difficult. In particular, if you are an out of state or country investor, you may not be familiar with all required paperwork such as tax documents. There may be additional documents required by the local and federal governments that need to be completed. Property managers are experts at ensuring that both party’s rights are preserved in any paperwork such as contracts. It can be easy for landlords on their own to accidentally miss necessary parts of contracts.
Your property manager will also assist you with bills surrounding property maintenance and repairs. They will ensure that you know when bills are due so that they can be paid.
- Geographical Advantage
If you manage your own properties, you are pretty much limited to investment opportunities within a tight radius of your own home. On the other hand, if you hire a property manager, you can take advantage of investment deals in any location you wish.
- Expert Advice
The property managers can also provide expert advice and recommendations for future investment purchases such as the area to invest, type of property to buy, type of mortgage to get, etc. They can connect you with the best real estate brokers, mortgage brokers, insurance brokers, inspection companies, etc.
By hiring a property manager who takes care of the day-to-day aspects of running your income property, you will have more time to spend identifying further investment opportunities or otherwise furthering your career or growing your business.
Property management is not the place to cut corners. A property manager is an essential piece of any investment property. Property management firms can save property investors a lot of time, money, and headaches. The key is to find a reputable property management company with great reviews that ensure transparency. It should be using the latest tools and technologies to meet and surpass tenant expectations. They will save you time so that you can focus on your critical tasks and grow your investment portfolio.