For many real estate investors, deciding whether or not to utilize property management company is a difficult decision. Some people wouldn’t dare consider making a real estate investment without first hiring a property manager. Others, though, find it difficult to shake the “do-it-yourself” mentality that holds them back from achieving more. It turns out that hiring a property management business isn’t as simple as you might have thought. What a property manager does and whether they are worthwhile are two questions you might ask yourself. If nothing else, I am certain that utilizing a property management business has much more advantages than disadvantages.
It is fair to claim that the cost of working with a property manager is the root of the argument, but for many it is about knowing who to trust. And that concern is definitely valid considering that you’ll be entrusting your assets with them. Reminder: it is still important to do your own research and due diligence.
While the costs of a property manager can seem pricey at first, it is important to understand that the price is more of an investment rather than a drawback. Depending on how complex the project is, it is recommended that engaging a property manager is worth the cost. This is as opposed to you doing it yourself which may or may not end up costing more than you might think. Additionally, their participation could significantly boost your possibilities of increasing your bottom line. Here are some crucial responsibilities a professional property manager will add to your rental portfolio if that isn’t enough.
What is A Property Management Company?
Property management is the process by which a third party is in charge of upholding the status quo and satisfying the residents of a home. Rental property owners typically employ property managers to supervise the day-to-day management of their real estate assets and respond to any inquiries or complaints that renters may have. Single-family homes to holiday rentals are among the property kinds that property management businesses can handle. Condos, apartments, mobile home parks, and office or retail buildings are more examples.
It is the property manager’s responsibility to ensure that an vacant property is rented out and kept in good condition. Property management, as the name implies, takes care of all facets of a rental property, from advertising vacant properties and negotiating leases to collecting rent and scheduling repairs. The hiring of a third-party property manager is one of the best tactics for a rental portfolio, which raises the obvious question: How do property manager operate?
Reasons To Hire A Property Management Company
Many investors wholeheartedly endorse using a property management company. There is no requirement that everyone hire a property manager, though. Despite having many benefits, property manager can be expensive. So here are some of the reasons why you might want to hire a property manager:
- Multiple Properties: You want to buy several rental houses. Property management companies become increasingly required as one’s rental portfolio grows. If you are interested, check out this article on reasons to own your own vacation rental property.
- Distance: Your asset is not in close proximity to you. Hiring a manager who can keep a better eye on the rental property is a smart option if it’s far from your home.
- Active Management: You do not want to deal with the hassle of active managing the property. You will require a property manager to handle regular upkeep and day-to-day operations. This is if you intend to use the property as a passive income source.
- Limited time: Even if you want to manage your property, you might not always be able to actively work on it. The best course of action may be to hire a property management company if you intend to concentrate more on managing your business.
- Affordability: Finally, if it is within your budget, do consider a property manager for your properties. You should anticipate quotes for property management services that range from 5% to 15% of your rental income. A down market would be an exception to this rule. Check out this article on the breakdown on the property management fees.
What Does A Property Manager Do?
One of the most common questions that is often asked is what do property managers do? And for the price that you are paying, it is a very valid question. While services may differ from each company, we will try to break down some of the To effectively break it down, here are some of the duties that are performed here at Nova Vacation Homes:
- Rent collection and accounting
- Maintenance of the property
- Dealing with all tenant facing issues and situations
- Limit vacancies with leading strategies
- Record and document all activities regarding the property
- Simplify all taxes (we even do your taxes for you)
- Sign new leases and draft appropriate documents
- Research and marketing
- and so much more
3 Benefits Of Having A Property Manager
Working with property management businesses gives investors access to the single most valuable perk: time. Investors can free up time to handle other obligations by hiring the services of a reputable property management business. This will relieve them of the burden of managing the property themselves. Others find that their lives are freed from needless burden by not having to manage a property and all the complications. But it’s important to remember that choosing a property management business isn’t always a matter of time. Hiring a manager has a number of advantages, here are the top 3 benefits of hiring a property management company:
- Reduced Liabilities: One of the little-known benefits of using a third-party property management company is the layer of protection against liability a professional property manager gives to the portfolio of a novice investor. Opportunistic tenants may make erroneous claims regarding unfair rent collecting methods, wrongful eviction procedures, and careless upkeep. A professional property management company can dispel a lot of the inaccurate accusations made against an investment.
- Quality Maintenance: Investors that engage with reputable property management companies will have access to their network of qualified subcontractors. You’ll benefit from the contacts the property management already has and save down on maintenance expenses. Additionally, the contractors will provide a recommendation, which is quite helpful.
- Quality Tenants with Proper Screening: Companies that specialize in property management do it for a living and are skilled at it. The best of them have learned what to look for in a decent tenant as a result of their professional screening process. This is especially true for vacation rental properties that require expert screening process to ensure short term rental stays are legitimate.
If you are thinking of getting into Vacation rentals, check out this article first.
So now that you have read through this whole article, are property management companies worth it? Well, it does depend on your needs and experience. If you are a well experienced property manager yourself, then you probably don’t need it. However, even with all of those requisites, it still might be a good idea to hire a professional property management company. This will give you back a lot of time and lot less headache that comes with actively managing your own portfolio.