Blog
Why
Use a Property Manager?
Most
experienced property investors use property managers. Why? Because they make
you money.
By
Glenn Murray | Advertising
Copywriter, Website
Copywriter, Article PR Specialist *
Property
management isn’t just about collecting rent. It’s about ensuring your property
is always rented, ensuring you have the best possible tenants, and ensuring
you’re getting the best possible rent. It’s about keeping the property well
maintained, tracking expenses and income, and dealing with the legalities of
leases and the rights of tenants.
This
is what property managers do. It’s their core business. For a landlord, the
benefits are significant.
Save
Valuable Time
The
most obvious benefit is time saving. You don’t have to spend an hour or so each
week making phone calls, placing ads, interviewing prospective tenants,
speaking to solicitors, speaking to your tenants, collecting rent, organising
tradesmen and so on.
How
much could you earn in that hour if you were focussing on your work rather than
chasing your tail?
Know
Your Market
Property
investment is a business. To succeed in business, you need to know your market.
Property
managers make their living out of knowing the rental marketplace. They know how
much your property is worth and who’ll want it. They know the best ways to
reach the market and they have the resources to do it.
A
property manager with some real marketing nous can earn you thousands every
year, just with an intelligent marketing campaign.
Know
Your Rights
Rental
legislation is constantly changing. It’s important that you know your rights as
well as the rights of your tenants. But most people don’t even know where to
start looking.
Property
managers work with tenancy legislation every day. They know all the ins and
outs, as well as the pitfalls and loopholes. They’re experienced in all aspects
of lease negotiation – from bond to maintenance agreements to eviction.
Most
importantly, they’ll protect your rights as a landlord.
Get
Good Tenants
Most
good tenants will only rent through property managers. The whole process is
much more streamlined and convenient. Payments can be made electronically,
their questions can be answered quickly, and everything can be done during
business hours.
The
opposite is true of bad tenants. They target privately managed rentals, because
that’s generally all they can get.
Property
managers chase down and validate every reference, and they get to know problem
tenants. They do everything possible to provide you with a hassle-free
investment because they know the eviction process is every landlord’s worst
fear. You can’t just kick someone out without notice. The whole process can
take months.
But
if you’re unlucky enough to end up with a problematic tenant, a property
manager will manage the whole eviction process – including all dealings with
tenants, sheriffs, and court officials.
Sure,
you can juggle all of these elements yourself, and you’ll save yourself a small
management fee… But what’s the cost? Do you want to work for your investment or
do you want it working for you?
When Real
Estate Management Makes Sense
The choice
to get involved in real estate investing is a large one and even after the
substantial process of determining whether a particular investment is right for
you, a number of decisions must be made as to how you are going to manage that
property. One option for property management is hiring outside help to give you
the luxury of having a hands-off approach to your investment property in
exchange for giving up some of your potential profitability.
Obviously,
giving up some of the profitability of your investment property is a heavy
price to pay but in some situations, the luxury of not having to take care of
the day-to-day operations of a property is worth the cost. These are some
questions that you should ask yourself about your investment property to
determine whether hiring outside property management is something that you
should consider.
What Are
The Costs?
The cost of
rental property management can often surpass just the up-front fee charged by
the rental property management company. While that fee will make up the
majority of the cost (often between 4 percent and 12 percent of rental payments
in most areas of the country), knowing what kinds of services will include
extra costs is an important factor in determining whether a particular company
fits your investment property.
Evictions
are sometimes a part of the rental property process and it is possible that a
rental property management company will charge a premium for eviction
proceedings. If you want the company to handle things like showings and
property walkthroughs, sometimes those activities will incur additional costs.
It is important to get a full slate of costs, beyond just the base percentage
of rent amount cost.
What Is
Their Portfolio Like?
If you have
a variety of single family investment properties, you should probably look for
a property management company with particular experience in single-family
homes. Likewise, for a series of multi-family investment properties look for
companies that manage multi-family investment properties as a specialty.
The cost
you're paying for is not just a reduction in your own day-to-day activity with
an investment property but also is payment for the expertise of a property
management company. Make sure that the expertise you're paying for has been
honed on the type of property you're looking to get management services for.
What Is
Your Role?
Many
property management companies will have a threshold for spending that requires
your approval. This is often negotiable if you want to further lessen your
involvement in the process. For those that want to have as big a hands-off
approach as possible, look for organizations that thrive on taking the reigns
of a property fully from the property owner. Do they provide status reports?
What is their communication plan like? These are prime questions to ask if
minimizing your involvement in the day-to-day operations of your investment
property is a chief concern.
What kind
of role do you have to play in new rentals? Much of the time, rental property
management companies will take on all of the tasks needed to put a new renter
in your property. However, it is worth asking the question to determine what
kind of time turn around you can expect in getting a new tenant in and seeing
just what kind of effort you have to put forth to ease that process.
Rental
property investment is a large time and effort commitment but after selecting
your investment, rental property management companies can take some of that
time and effort out of your hands. In determining whether that time and effort
savings is worth the cost expense, it is important to ask some of these
questions.
Rental
property management is not for everyone, so make sure that you are comfortable
with what will be expected of you and what you will be expected to give up
before committing to any kind of long-term agreement.
This is
another original article by Joe Lane, co-owner of The Lane Real Estate Team at http://www.joelane.com/. Are you
looking for an experienced Tri
City WA Real Estate agency?
With 20 years of service based, business experience, Joe and Colleen Lane work
hard to serve home buyers and sellers for the Tri Cities of Washington's
Kennewick, Richland, Pasco, and surrounding areas.
