Initially you may consider yourself a handy-person for property repairs or that you have the time to deal with what you might imagine are the possible requirements of a landlord. Perhaps also, you live close to the investment property and feel you can respond quickly and effectively to any needs of the property, or tenants. However there are five key factors to consider before you take on this new role. If financial savings and time are valuable to you, it might be helpful to contemplate the following benefits of hiring a Property Management Company.
No one is better placed than a property manager to know what the right rental price is. Their deep and thorough knowledge of the area and market mean they are best equipped to find that crucial balance. The word is balance, knowing that price that maximizes monthly income, while also ensuring the property remains occupied. Through experience they are also well placed to be able to anticipate any movement in the local rental market. They also have the tools to conduct an accurate market study.
Collection of payment
Perhaps you are in a situation where your number of income properties is limited for now, perhaps you own one, meaning the payment and arrival of rental funds is crucial to your finances. Perhaps the funds are set up and organized to contribute towards mortgage payments, or similar. Managing the property independently can create in your mind moments where you need to check or might consider if the payment will arrive on time. Perhaps historically, or in sensing the quality and behavior of the tenants, you might consider that payment is not a concern. However instead of being on the frontline of this monthly deadline it might be wise to consider that a property management can take the lead here and take away that itch.
Marketing & Advertising
Huge plus value here for hiring a property management company. With today’s quick and simple use of apps and websites, it can appear an attractive option to handle marketing and the placement of any adverts. However, the elements involved, be it photography, or website choice, the use of language, key words, timing, overall presentation, and tone, might all be best placed in the hands of experts who have a deep understanding of what attracts serious prospective tenants. Long vacancies are the nightmare of any landlord. A good idea might be to know that you have put your best foot forward from the very start.
Property management companies normally set up their charge as a percentage of the monthly rental rate of your property. Typically fees run anywhere from 10-12%. Normally a contract with a property company might last 12-24 months, with opportunity to extend.
It is important to establish from the outset what services are included. It may be that some maintenance costs are included in the monthly charge, allowing for individual billing of other charges.
Finding the right tenants
Instincts are a wonderful tool and there is something to be said for the feeling that leads to a decision of selecting tenants when managing a property independently. However emotions and the like can get the better of our own judgment. A property management company can offer the same initial process as you might, but then through their handling of the screening process that can sift for the best possible tenants. Normally any screening would encompass a criminal record check, security screening, and credit checks. This method allows for the element of surprise to be limited to a much lower percentage.
Once the tenants are inside the property the more savings and the value of using a property management company are discovered. Property damage, faults, accidents, repairs and all managed at this first point of contact. Management companies are also experienced and prepared to handle any conflicts that arise, as well as having a clear and sound knowledge of the law, and how it might direct any response to matters.
Here is another big value area for hiring a management firm. It is practically impossible to compete with a property company in this area where they have an up to date portfolio of trusted maintenance specialists, tradespersons, contractors, vendors and suppliers. Crucially many of these contractors will also prioritise their availability to property companies for obvious relationship building. Property management companies have the added ability to oversee, manage and follow up on your behalf any works. They should also keep on top of which companies can offer the highest quality and cost value in a changing market.
Owning numerous or even one investment property will mean you will require a number of calendar or reminder updates throughout the year. To stay compliant with any legal or regulation deadlines, or expiry dates, might be very taxing. Avoid lawsuits, headaches, and have peace in knowing the technical structure of a property management company enables your properties to stay fully complaint with the law.
Managing your own property might restrict the geography choices you have as a property investor. Using a property management company can allow you to spread your net further. There may be the possibility of an excellent investment opportunity further afield, but the distance from your own location means you chose not to invest. Using a property management company here allows geographic freedom.
Hassles and headaches are inevitable, but using a property management company provides an excellent buffer. No property management company can take away, or eliminate the ultimate responsibility you, the landlord holds, but they can definitely lighten the weight on your shoulders and provide true value.