Real estate has and always will be one of the top investment classes for individuals who want to build wealth and establish financial security. And out of all the different real estate investment niches that exist, residential rental properties reign supreme. But if you’re going to go down this route, make sure you have a little help in your corner!
Property Managers: What Do They Do?
Trying to manage rental properties on your own is a headache – especially if you have another full-time job and other professional obligations. Thankfully, there’s an alternative option that allows you to earn passive monthly income without being totally hands-on. It requires you to hire a property manager to oversee your investment.
A property manager is an individual or company that’s paid to handle the day-to-day responsibilities and duties associated with your rental property. This may include any or all of the following: property marketing, tenant screening, signing lease agreements, rent collection, maintenance and repair coordination, accounting, and taxes.
You can hire a property manager to manage a single property or an entire portfolio. Prices and fees vary, but you can typically expect to pay a percentage of the rent. Others ask for a flat fee per property.
6 Reasons to Hire a Property Manager
Still trying to decide whether or not a property manager is right for you? Here are a few reasons why we highly recommend hiring one:
1. Long-Term ROI
You can definitely save some money upfront by managing your properties on your own, but the long-term costs of DIY landlording are typically much higher than the monthly fee you fork over to a professional property management company. If you’re serious about being a real estate investor for years to come, a property manager is a no-brainer.
2. Better Tenants
A property management company is going to take the time to screen for good, qualified tenants. Because they know that their success depends on their ability to keep the cash flowing.
For example, Green Residential in Round Rock, Texas is so confident in their tenant screening processes that they actually offer tenant placement guarantee and rental income guarantee (based on the tenants they place). As a landlord, it doesn’t get much sweeter than that!
3. Saves Time
Think about all of the time you waste answering phone calls late at night or running over to a property to fix a running toilet at one of your units. This is time that you can’t get back.
A property management service fields the calls, dispatches qualified repair professionals, and doesn’t bother you unless the issue crosses a certain financial threshold.
4. Better Organization
Organization is one of the keys to being a successful landlord. So if you’re someone who is sloppy with forms and can’t ever seem to file away the right documents in the appropriate place, a property management company is a breath of fresh air. They keep everything where it’s supposed to be so that you never have any issues.
5. Lower Turnover and Vacancy
A good property manager is incentivized to keep your property leased. As soon as the property stops making money, they stop making money. So you can expect to see lower turnover and vacancy when you work with one of these professionals.
6. Less Risk
If you’re trying to navigate complex legal laws on your own, you’re bound to mess up. Whether it’s rules regarding how you can screen tenants, when you can send an eviction notice, or how much you can charge in late fees and penalties, a property management company will handle all of these issues on your behalf. This means less risk and stress for you!
Finding the Right Fit
Knowing you need to hire a property manager and hiring the right person are two totally different things. There are plenty of property managers and services, but you’ll find that certain ones are better fits than others.
Consider whether you want a local property management service, or a national service that happens to have a presence in your market. Furthermore, you’ll want to think about the different services they offer, the cost, and the reputation.
Not all property managers are created equal. By taking your time and researching each of your options, you’ll increase your odds of finding a service that benefits you for years to come.